ZS Collar Strategy
ZS (Zscaler, Inc.), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
Zscaler, Inc. operates as a cloud security company worldwide. The company provides Zscaler Internet Access solution that provides users, servers, operational technology, Internet of Things device secure access to externally managed applications, including software-as-a-service (SaaS) applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also offers Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy to understand digital experience score for each user, application, and location within an enterprise. In addition, the company provides workload segmentation solutions comprising Zscaler Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and platform as a service to reduce risk and ensure compliance with industry and organizational benchmarks; and Zscaler Cloud Workload Segmentation, which is designed to secure application-to-application communications inside public clouds and data centers to stop lateral threat movement, as well as prevents application compromise and reduces the risk of data breaches. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. It serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries.
ZS (Zscaler, Inc.) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $24.51B, a beta of 0.96 versus the broader market, a 52-week range of 114.625-336.99, average daily share volume of 3.0M, a public-listing history dating back to 2018, approximately 7K full-time employees. These structural characteristics shape how ZS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.96 places ZS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on ZS?
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 ZS snapshot
As of May 15, 2026, spot at $161.02, ATM IV 83.91%, IV rank 100.00%, expected move 24.06%. The collar on ZS 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 28-day expiry.
Why this collar structure on ZS specifically: IV regime affects collar pricing on both sides; elevated ZS IV at 83.91% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 24.06% (roughly $38.74 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ZS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZS should anchor to the underlying notional of $161.02 per share and to the trader's directional view on ZS stock.
ZS collar setup
The ZS 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 ZS near $161.02, the first option leg uses a $170.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZS chain at a 28-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 ZS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $161.02 | long |
| Sell 1 | Call | $170.00 | $11.70 |
| Buy 1 | Put | $152.50 | $10.45 |
ZS collar risk and reward
- Net Premium / Debit
- -$15,977.00
- Max Profit (per contract)
- $1,023.00
- Max Loss (per contract)
- -$727.00
- Breakeven(s)
- $159.77
- Risk / Reward Ratio
- 1.407
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.
ZS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ZS. 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% | -$727.00 |
| $35.61 | -77.9% | -$727.00 |
| $71.21 | -55.8% | -$727.00 |
| $106.81 | -33.7% | -$727.00 |
| $142.42 | -11.6% | -$727.00 |
| $178.02 | +10.6% | +$1,023.00 |
| $213.62 | +32.7% | +$1,023.00 |
| $249.22 | +54.8% | +$1,023.00 |
| $284.82 | +76.9% | +$1,023.00 |
| $320.42 | +99.0% | +$1,023.00 |
When traders use collar on ZS
Collars on ZS hedge an existing long ZS 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.
ZS thesis for this collar
The market-implied 1-standard-deviation range for ZS extends from approximately $122.28 on the downside to $199.76 on the upside. A ZS collar hedges an existing long ZS 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 ZS IV rank near 100.00% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on ZS at 83.91%. As a Technology name, ZS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZS-specific events.
ZS 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. ZS positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ZS alongside the broader basket even when ZS-specific fundamentals are unchanged. Always rebuild the position from current ZS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ZS?
- A collar on ZS is the collar strategy applied to ZS (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 ZS stock trading near $161.02, the strikes shown on this page are snapped to the nearest listed ZS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ZS 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 ZS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 83.91%), the computed maximum profit is $1,023.00 per contract and the computed maximum loss is -$727.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ZS collar?
- The breakeven for the ZS collar priced on this page is roughly $159.77 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 ZS market-implied 1-standard-deviation expected move is approximately 24.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ZS?
- Collars on ZS hedge an existing long ZS 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 ZS implied volatility affect this collar?
- ZS ATM IV is at 83.91% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.