VREX Collar Strategy
VREX (Varex Imaging Corporation), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Varex Imaging Corporation designs and manufactures X-ray imaging components. The company operates in two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction and computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy, oncology, CT, cardiac, surgery, dental, computer-aided detection, and other diagnostic radiography uses. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital detectors, and high voltage connectors for use in security and industrial inspection applications, such as airport security, cargo screening at ports and borders, and nondestructive testing and examination in various applications. Varex Imaging Corporation sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users.
VREX (Varex Imaging Corporation) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $423.9M, a beta of 0.96 versus the broader market, a 52-week range of 6.76-14.565, average daily share volume of 320K, a public-listing history dating back to 2017, approximately 2K full-time employees. These structural characteristics shape how VREX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.96 places VREX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on VREX?
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.
Current VREX snapshot
As of May 15, 2026, spot at $9.75, ATM IV 75.20%, IV rank 16.59%, expected move 21.56%. The collar on VREX below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.
Why this collar structure on VREX specifically: IV regime affects collar pricing on both sides; compressed VREX IV at 75.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 21.56% (roughly $2.10 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated VREX expiries trade a higher absolute premium for lower per-day decay. Position sizing on VREX should anchor to the underlying notional of $9.75 per share and to the trader's directional view on VREX stock.
VREX collar setup
The VREX collar below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With VREX near $9.75, the first option leg uses a $10.24 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VREX chain at a 34-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 VREX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $9.75 | long |
| Sell 1 | Call | $10.24 | N/A |
| Buy 1 | Put | $9.26 | N/A |
VREX collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
VREX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on VREX. 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.
When traders use collar on VREX
Collars on VREX hedge an existing long VREX 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.
VREX thesis for this collar
The market-implied 1-standard-deviation range for VREX extends from approximately $7.65 on the downside to $11.85 on the upside. A VREX collar hedges an existing long VREX 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 VREX IV rank near 16.59% 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 VREX at 75.20%. As a Healthcare name, VREX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VREX-specific events.
VREX 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. VREX positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VREX alongside the broader basket even when VREX-specific fundamentals are unchanged. Always rebuild the position from current VREX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on VREX?
- A collar on VREX is the collar strategy applied to VREX (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 VREX stock trading near $9.75, the strikes shown on this page are snapped to the nearest listed VREX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are VREX 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 VREX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 75.20%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a VREX collar?
- The breakeven for the VREX collar priced on this page is no defined breakeven on the modeled curve at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current VREX market-implied 1-standard-deviation expected move is approximately 21.56%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on VREX?
- Collars on VREX hedge an existing long VREX 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 VREX implied volatility affect this collar?
- VREX ATM IV is at 75.20% with IV rank near 16.59%, 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.