How are YUMC 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 YUMC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.90%), the computed maximum profit is $313.50 per contract and the computed maximum loss is -$186.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a YUMC collar?

The breakeven for the YUMC collar priced on this page is roughly $44.37 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 YUMC market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current YUMC implied volatility affect this collar?

YUMC ATM IV is at 28.90% with IV rank near 24.37%, 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.

YUMC Collar Strategy

YUMC (Yum China Holdings, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NYSE.

Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates through two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Little Sheep, Huang Ji Huang, Lavazza, COFFii & JOY, Taco Bell, and East Dawning brands, which specialize in chicken, pizza, hot pot cooking, simmer pot, Italian coffee, specialty coffee, Mexican-style food, and Chinese food categories. The company also operates V-Gold Mall, a mobile e-commerce platform, which sells electronics, home and kitchen accessories, and other general merchandise, as well as fried rice, steak, pasta and other ready meals, and coffee capsules. In addition, it operates franchise restaurants under the KFC, Pizza Hut, Huang Ji Huang, Taco Bell, Little Sheep, East Dawning, Lavazza, and COFFii & JOY names. As of March 31, 2022, the company operated 12,117 restaurants in approximately 1,700 cities.

YUMC (Yum China Holdings, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $16.47B, a trailing P/E of 17.51, a beta of 0.12 versus the broader market, a 52-week range of 41.69-58.39, average daily share volume of 1.6M, a public-listing history dating back to 2016, approximately 140K full-time employees. These structural characteristics shape how YUMC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.12 indicates YUMC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. YUMC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on YUMC?

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 YUMC snapshot

As of May 15, 2026, spot at $45.59, ATM IV 28.90%, IV rank 24.37%, expected move 8.29%. The collar on YUMC 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 245-day expiry.

Why this collar structure on YUMC specifically: IV regime affects collar pricing on both sides; compressed YUMC IV at 28.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.29% (roughly $3.78 on the underlying). The 245-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated YUMC expiries trade a higher absolute premium for lower per-day decay. Position sizing on YUMC should anchor to the underlying notional of $45.59 per share and to the trader's directional view on YUMC stock.

YUMC collar setup

The YUMC 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 YUMC near $45.59, the first option leg uses a $47.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed YUMC chain at a 245-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 YUMC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$45.59	long
Sell 1	Call	$47.50	$4.20
Buy 1	Put	$42.50	$2.98

YUMC collar risk and reward

Net Premium / Debit: -$4,436.50
Max Profit (per contract): $313.50
Max Loss (per contract): -$186.50
Breakeven(s): $44.37
Risk / Reward Ratio: 1.681

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.

YUMC collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on YUMC. 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.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$186.50
$10.09	-77.9%	-$186.50
$20.17	-55.8%	-$186.50
$30.25	-33.7%	-$186.50
$40.33	-11.5%	-$186.50
$50.41	+10.6%	+$313.50
$60.48	+32.7%	+$313.50
$70.56	+54.8%	+$313.50
$80.64	+76.9%	+$313.50
$90.72	+99.0%	+$313.50

When traders use collar on YUMC

Collars on YUMC hedge an existing long YUMC 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.

YUMC thesis for this collar

The market-implied 1-standard-deviation range for YUMC extends from approximately $41.81 on the downside to $49.37 on the upside. A YUMC collar hedges an existing long YUMC 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 YUMC IV rank near 24.37% 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 YUMC at 28.90%. As a Consumer Cyclical name, YUMC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to YUMC-specific events.

YUMC 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. YUMC positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move YUMC alongside the broader basket even when YUMC-specific fundamentals are unchanged. Always rebuild the position from current YUMC chain quotes before placing a trade.

Frequently asked questions

What is a collar on YUMC?: A collar on YUMC is the collar strategy applied to YUMC (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 YUMC stock trading near $45.59, the strikes shown on this page are snapped to the nearest listed YUMC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are YUMC 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 YUMC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.90%), the computed maximum profit is $313.50 per contract and the computed maximum loss is -$186.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a YUMC collar?: The breakeven for the YUMC collar priced on this page is roughly $44.37 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 YUMC market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on YUMC?: Collars on YUMC hedge an existing long YUMC 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 YUMC implied volatility affect this collar?: YUMC ATM IV is at 28.90% with IV rank near 24.37%, 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.