SNDK: Zero-Cost Collar Opportunity on a Momentum Leader

I’ve been looking at ways to stay involved in some of the strongest momentum names without accepting full downside exposure after such large moves. One setup that caught my attention is SNDK. The stock has gone from roughly $36 to over $1,680 in about a year, making it one of the strongest-performing large-cap stocks in the market. It’s now trading with a market cap north of $250B and remains above all major moving averages. The obvious challenge is that buying outright shares here requires accepting significant downside risk after a massive run. What I found interesting is that the options market currently allows for a near zero-cost collar structure due to the shape of the volatility surface. **Current Setup** \- Stock price: \~$1,684 \- Expiration: June 17, 2027 (\~383 DTE) \- Implied volatility: \~103% \- Expected move by expiration: \~$1,360 \- Notable call skew Because upside calls are trading at rich premiums, it’s possible to: \- Buy a protective put roughly 12% below spot \- Sell a call roughly 47% above spot \- Structure the trade for approximately zero net cost **What This Creates** The resulting profile looks roughly like: \- Downside before protection: \~12% \- Upside potential: \~47% \- Risk/reward: approximately 1:4 Instead of owning stock with open-ended downside, you’re essentially exchanging some of the upside beyond the call strike for downside protection. **Why It Exists** I don’t necessarily think the options market is “wrong.” SNDK has been extraordinarily volatile and the market is correctly pricing a wide distribution. The interesting part is the skew. Demand for upside exposure appears strong enough that investors can sell some of that upside convexity and use the proceeds to fund meaningful protection. In other words: The market is willing to pay you quite a lot for upside exposure while simultaneously offering relatively attractive downside insurance. **Who Might Care?** This seems most useful for: \- Existing shareholders sitting on large gains \- Investors who remain bullish but are uncomfortable with full downside exposure \- Long-term holders looking to reduce left-tail risk **The trade-off is straightforward:** You cap your upside beyond the call strike, but gain protection against a significant decline. Not saying it’s the right trade for everyone, but I found it an interesting example of how option skew can sometimes be used to reshape the payoff profile of a high-momentum stock. Let me know what you think. $MU is an example that is even more extreme which I have discussed before.