How are VNOM collar max profit and max loss calculated?

Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the VNOM collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.10%), the computed maximum profit is $198.00 per contract and the computed maximum loss is -$202.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a VNOM collar?

The breakeven for the VNOM collar priced on this page is roughly $42.02 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The VNOM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current VNOM implied volatility affect this collar?

VNOM ATM IV is at 25.10% with IV rank near 2.39%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

VNOM Collar Strategy

VNOM (Viper Energy, Inc.), in the Energy sector, (Oil & Gas Midstream industry), listed on NASDAQ.

Viper Energy Partners LP is an entity dedicated to the ownership, acquisition, and development of oil and natural gas assets across North America. By the end of 2021, the company had established mineral interests encompassing 27,027 net royalty acres, primarily located within the prolific Permian Basin and Eagle Ford Shale formations. At that time, its proven hydrocarbon reserves were estimated to be 127,888 thousand barrels of crude oil equivalent. Viper Energy Partners GP LLC acts as the general partner responsible for managing the company's operations. Founded in 2013, Viper Energy Partners LP maintains its headquarters in Midland, Texas, and operates as a subsidiary of Diamondback Energy, Inc.

VNOM (Viper Energy, Inc.) trades in the Energy sector, specifically Oil & Gas Midstream, with a market capitalization of approximately $15.20B, a trailing P/E of 138.67, a beta of 0.25 versus the broader market, a 52-week range of 35.1-51.13, average daily share volume of 1.8M, a public-listing history dating back to 2014. These structural characteristics shape how VNOM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.25 indicates VNOM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 138.67 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. VNOM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on VNOM?

A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot.

VNOM snapshot

As of August 14, 2026, spot at $42.32, ATM IV 25.10%, IV rank 2.39%, expected move 7.20%. The collar on VNOM below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this collar structure on VNOM specifically: IV regime affects collar pricing on both sides; compressed VNOM IV at 25.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.20% (roughly $3.05 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated VNOM expiries trade a higher absolute premium for lower per-day decay. Position sizing on VNOM should anchor to the underlying notional of $42.32 per share and to the trader's directional view on VNOM stock.

VNOM collar setup

The VNOM collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With VNOM at $42.32 on that close, the first option leg uses a $44.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VNOM chain at a 35-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 VNOM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$42.32	long
Sell 1	Call	$44.00	$0.73
Buy 1	Put	$40.00	$0.43

VNOM collar risk and reward

Net Premium / Debit: -$4,202.00
Max Profit (per contract): $198.00
Max Loss (per contract): -$202.00
Breakeven(s): $42.02
Risk / Reward Ratio: 0.980

Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium.

VNOM collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on VNOM. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$202.00
$9.37	-77.9%	-$202.00
$18.72	-55.8%	-$202.00
$28.08	-33.7%	-$202.00
$37.43	-11.5%	-$202.00
$46.79	+10.6%	+$198.00
$56.15	+32.7%	+$198.00
$65.50	+54.8%	+$198.00
$74.86	+76.9%	+$198.00
$84.21	+99.0%	+$198.00

When traders use collar on VNOM

Collars on VNOM hedge an existing long VNOM stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.

VNOM thesis for this collar

The market-implied 1-standard-deviation range for VNOM extends from approximately $39.27 on the downside to $45.37 on the upside. A VNOM collar hedges an existing long VNOM position with a protective put while financing the put cost via a short call; when the premiums roughly offset, the collar acts as a near-zero-cost insurance band around the current spot. Current VNOM IV rank near 2.39% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on VNOM at 25.10%. As a Energy name, VNOM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VNOM-specific events.

VNOM collar positions are structurally neutral (protective); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. VNOM positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VNOM alongside the broader basket even when VNOM-specific fundamentals are unchanged. Always rebuild the position from current VNOM chain quotes before placing a trade.

Frequently asked questions

What is a collar on VNOM?: A collar on VNOM is the collar strategy applied to VNOM (stock). The strategy is structurally neutral (protective): A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot. With VNOM stock at $42.32 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed VNOM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are VNOM collar max profit and max loss calculated?: Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the VNOM collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.10%), the computed maximum profit is $198.00 per contract and the computed maximum loss is -$202.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a VNOM collar?: The breakeven for the VNOM collar priced on this page is roughly $42.02 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The VNOM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on VNOM?: Collars on VNOM hedge an existing long VNOM stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
How does current VNOM implied volatility affect this collar?: VNOM ATM IV is at 25.10% with IV rank near 2.39%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.