How are ZBH 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 ZBH collar priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $550.50 per contract and the computed maximum loss is -$449.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ZBH collar?

The breakeven for the ZBH collar priced on this page is roughly $89.50 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 ZBH market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ZBH implied volatility affect this collar?

ZBH ATM IV is at 27.70% with IV rank near 4.47%, 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.

ZBH Collar Strategy

ZBH (Zimmer Biomet Holdings, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NYSE.

Zimmer Biomet Holdings, Inc. engages in the design, manufacture, and marketing of orthopedic reconstructive products. The firm also offers sports medicine, biologics, extremities, and trauma products, spine, craniomaxillofacial, and thoracic products, office-based technologies, dental implants, and related surgical products. It operates through the following geographical segments: Americas, Europe Middle East and Africa, and Asia Pacific. The Americas segment consists of the U.S. and includes other North, Central and South American markets. The Europe Middle East and Africa segment includes France, Germany, Italy, Spain, and the United Kingdom. The Asia Pacific segment refers to the key markets such as Japan, China, Australia, New Zealand, Korea, Taiwan, India, Thailand, Singapore, Hong Kong, and Malaysia.

ZBH (Zimmer Biomet Holdings, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $18.01B, a trailing P/E of 23.85, a beta of 0.47 versus the broader market, a 52-week range of 79.12-108.29, average daily share volume of 2.3M, a public-listing history dating back to 2001, approximately 17K full-time employees. These structural characteristics shape how ZBH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.47 indicates ZBH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ZBH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on ZBH?

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 ZBH snapshot

As of June 29, 2026, spot at $91.27, ATM IV 27.70%, IV rank 4.47%, expected move 7.94%. The collar on ZBH 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 81-day expiry.

Why this collar structure on ZBH specifically: IV regime affects collar pricing on both sides; compressed ZBH IV at 27.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.94% (roughly $7.25 on the underlying). The 81-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ZBH expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZBH should anchor to the underlying notional of $91.27 per share and to the trader's directional view on ZBH stock.

ZBH collar setup

The ZBH 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 ZBH near $91.27, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZBH chain at a 81-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 ZBH shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$91.27	long
Sell 1	Call	$95.00	$3.95
Buy 1	Put	$85.00	$2.18

ZBH collar risk and reward

Net Premium / Debit: -$8,949.50
Max Profit (per contract): $550.50
Max Loss (per contract): -$449.50
Breakeven(s): $89.50
Risk / Reward Ratio: 1.225

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.

ZBH collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on ZBH. 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%	-$449.50
$20.19	-77.9%	-$449.50
$40.37	-55.8%	-$449.50
$60.55	-33.7%	-$449.50
$80.73	-11.6%	-$449.50
$100.91	+10.6%	+$550.50
$121.09	+32.7%	+$550.50
$141.26	+54.8%	+$550.50
$161.44	+76.9%	+$550.50
$181.62	+99.0%	+$550.50

When traders use collar on ZBH

Collars on ZBH hedge an existing long ZBH 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.

ZBH thesis for this collar

The market-implied 1-standard-deviation range for ZBH extends from approximately $84.02 on the downside to $98.52 on the upside. A ZBH collar hedges an existing long ZBH 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 ZBH IV rank near 4.47% 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 ZBH at 27.70%. As a Healthcare name, ZBH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZBH-specific events.

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

Frequently asked questions

What is a collar on ZBH?: A collar on ZBH is the collar strategy applied to ZBH (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 ZBH stock trading near $91.27, the strikes shown on this page are snapped to the nearest listed ZBH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ZBH 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 ZBH collar priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $550.50 per contract and the computed maximum loss is -$449.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ZBH collar?: The breakeven for the ZBH collar priced on this page is roughly $89.50 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 ZBH market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on ZBH?: Collars on ZBH hedge an existing long ZBH 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 ZBH implied volatility affect this collar?: ZBH ATM IV is at 27.70% with IV rank near 4.47%, 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.