templatesoptionscommodities

Designing a Commodity Options Collar Spreadsheet: Inputs, Outputs and Trade Examples

UUnknown

2026-02-18

11 min read

Download an implementable collar spreadsheet with inputs, formulas and three worked examples for corn, wheat and soy (2026 update).

Stop waking up to unwanted drawdowns: build a collar spreadsheet that you can actually use

If you hold physical or paper positions in corn, wheat or soy and you worry about sudden downside from weather, demand shocks or liquidity squeezes, a collar spreadsheet template is one of the most pragmatic hedges you can run. In this guide (2026 edition) I give you a ready-to-implement collar spreadsheet template: explicit inputs, the exact formulas to paste into Excel/Google Sheets, and three worked examples using recent market levels so you can plug-and-trade.

Executive summary — what you get and why it matters

Quick take: the downloadable spreadsheet provides:

All required inputs (prices, contract sizes, strikes, premiums, commissions, implied vol and days to expiry)
Black‑76 call/put pricing cells (optional) and a workflow to paste mid-market option premiums if you pull quotes from your broker
Outputs that investors and producers care about: net premium, effective floor, capped ceiling, breakeven, max gain/loss, and P&L table for a range of settlement prices
Three worked examples — corn, wheat and soy — using recent late‑2025 / early‑2026 market levels so you can sanity‑check the numbers

Why a spreadsheet? Collars are simple in concept but execution depends on contract sizes, option quoting units (cents vs dollars), and whether you trade options on futures (typical) or cash options. A well-structured sheet avoids costly errors in sizing and currency.

2026 context — what changed and why collars are relevant now

Late 2024 through 2025 brought bigger, more frequent supply shocks in ag markets. In 2026, market participants are responding by:

Using smaller, more liquid micro/mini contracts and options that have expanded access for smaller farms and retail traders.
Implementing automated collar roll and monitoring via broker APIs and simple Google Sheets scripts — this reduces slippage and missed roll dates.
Relying more on data-driven strike selection: satellite weather indices and real‑time export data affect intraseason implied vol and option premiums, so collars are tuned dynamically.

These trends make collars both more accessible and more effective — but only if you build the math into a repeatable template.

How to think about a collar (pragmatic definition)

A collar combines two options against an underlying long (or short) exposure:

Long put — gives a floor (right to sell at strike); protects downside.
Short call — funds some/all of the put premium; caps upside if the underlying rallies above the call strike.

Use collars when you want to protect value but are willing to accept a capped upside. They are widely used by grain producers, processors and commodity funds.

Spreadsheet layout — inputs, core calculations and outputs

1) Inputs (place these in a single block for easy updates)

Instrument — Corn / Wheat / Soy
Spot / front-month futures — e.g., Corn = $3.825 /bu (CmdtyView national avg close), Soybeans = $9.82 /bu.
Contract size — typically 5,000 bu for CBOT corn/soy/wheat futures (put this in a cell so you can change for micro contracts).
Number of contracts — integer
Put strike (per bu)
Put premium (per bu) — use mid-market option quote or Black‑76 cell
Call strike (per bu)
Call premium (per bu)
Commissions / fees (per contract total)
Days to expiry (calendar days)
Annual interest rate for discounting (used if you implement Black‑76; e.g., 3%)
Implied vol (annualized %) — optional if you calculate theoretical prices

2) Core calculation cells (exact formulas to paste)

Assume you use these cell assignments (Excel or Google Sheets):

B2 = Spot price (per bu)
B3 = Contract size (bu per contract)
B4 = Number of contracts
B5 = Put strike
B6 = Put premium (per bu)
B7 = Call strike
B8 = Call premium (per bu)
B9 = Commission per contract
B10 = Days to expiry
B11 = Annual interest rate (decimal)

Key formulas (put these in labeled cells):

Total quantity (bu) → C2: =B3*B4
Put cost total → C3: =B6*C2
Call premium received total → C4: =B8*C2
Net premium (per bu) → C5: =B8 - B6
Net premium total → C6: =C5*C2
Total commissions → C7: =ABS(B4)*(B9) * 2 (assume enter and exit commissions; adjust as needed)
Effective floor (per bu) → C8: =B5 - C5 (put strike minus net premium paid)
Effective ceiling (per bu) → C9: =B7 - C5 (call strike minus net premium paid)
Breakeven (per bu) → C10: =B2 + C5 (if you start long at spot and net premium is paid, breakeven shifts)
Max loss (total) → C11: =IF(B2>C8,(B2 - C8)*C2,0) (loss relative to current spot if price falls to floor)
Max gain (total) → C12: =IF(C9>B2,(C9 - B2)*C2,0)

Notes: net premium positive means a net credit (you received premium); negative means net debit (you paid premium). The formulas above assume you are long the underlying (physical or long futures). If you are short the underlying, invert signs and logic.

3) Optional — Black‑76 theoretical pricing (for options on futures)

If you want the spreadsheet to compute option mid prices from implied volatility and forward price, use Black‑76. Typical implementation cells:

F1 = Futures price (per bu) — set equal to B2 or a quoted futures price
F2 = Strike (K)
F3 = Annual vol (decimal)
F4 = T in years → =B10/365
F5 = r (annual risk-free) → =B11

Calculate

d1 → = (LN(F1/F2) / (F3*SQRT(F4))) + 0.5*F3*SQRT(F4)
d2 → = d1 - F3*SQRT(F4)
Call Black76 → =EXP(-F5*F4)*(F1*NORMSDIST(d1) - F2*NORMSDIST(d2))
Put Black76 via parity → =Call + EXP(-F5*F4)*F2 - EXP(-F5*F4)*F1

Paste exact functions (example in Excel):

=EXP(-$F$5*$F$4)*($F$1*NORMSDIST($G$1)-$F$2*NORMSDIST($G$2))

Black‑76 is the right theoretical model for options on futures. Use it only if you have reliable implied vol estimates; otherwise paste mid-market premiums from your broker into the Put Premium / Call Premium cells.

Worked examples — real numbers you can verify

Below are three concrete examples using recent market levels (late‑2025 closes / early‑2026 context). These are sized conservatively for illustration; change contract counts to match your exposure.

Example A — Corn collar (producer with 2 contracts = 10,000 bu)

Spot / front-month futures: $3.825 /bu (CmdtyView national average close)
Contract size: 5,000 bu
Contracts: 2 → Quantity = 10,000 bu
Put strike: $3.25; Put premium: $0.08 /bu
Call strike: $4.00; Call premium: $0.06 /bu
Commissions: $30 per contract round trip (example)
Days to expiry: 45

Calculations:

Total bu = 5,000 * 2 = 10,000 bu
Put cost total = 0.08 * 10,000 = $800
Call premium received = 0.06 * 10,000 = $600
Net premium per bu = 0.06 - 0.08 = -$0.02 (you pay $0.02 per bu; net debit)
Net premium total = -0.02 * 10,000 = -$200
Effective floor per bu = put strike - net premium = 3.25 - (-0.02) → be careful with signs — using our formula: floor = put strike - (call-premium - put-premium) = 3.25 - (-0.02) = 3.23
Effective ceiling per bu = call strike - net premium = 4.00 - (-0.02) = 3.98
Breakeven (relative to current spot) = spot + net premium = 3.825 + (-0.02) = 3.805
Max loss from current spot = (spot - floor) * quantity = (3.825 - 3.23) * 10,000 = $5,950
Max gain from current spot = (ceiling - spot) * quantity = (3.98 - 3.825) * 10,000 = $1,550

Interpretation: you paid $200 to establish a floor of approximately $3.23/bu while capping effective upside at roughly $3.98/bu. This is a low-cost collar; it costs money but limits downside while keeping upside through the mid‑$3.90s.

Example B — Wheat collar (processor with 1 contract = 5,000 bu)

For wheat we use a representative recent front-month close: $6.00 /bu (Chicago SRW reference, late‑2025 average).

Contract size: 5,000 bu
Contracts: 1 → Quantity = 5,000 bu
Put strike: $5.50; Put premium: $0.12 /bu
Call strike: $6.50; Call premium: $0.10 /bu
Net premium per bu = 0.10 - 0.12 = -0.02 (pay $0.02 per bu)

Outputs:

Effective floor = 5.50 - (-0.02) = $5.48 /bu
Effective ceiling = 6.50 - (-0.02) = $6.48 /bu
Max loss from current spot = (6.00 - 5.48) * 5,000 = $2,600
Max gain from current spot = (6.48 - 6.00) * 5,000 = $2,400

Interpretation: wheat example shows a near-symmetric collar where the cost is small. Processors who need to lock input costs but preserve modest upside often adopt this pattern.

Example C — Soybeans collar (merchant long 3 contracts = 15,000 bu)

Spot / front-month futures: $9.82 /bu (CmdtyView national average close)
Contract size: 5,000 bu
Contracts: 3 → Quantity = 15,000 bu
Put strike: $9.00; Put premium: $0.25 /bu
Call strike: $10.50; Call premium: $0.20 /bu
Net premium per bu = 0.20 - 0.25 = -0.05 (you pay $0.05 /bu)

Outputs:

Effective floor = 9.00 - (-0.05) = $8.95 /bu
Effective ceiling = 10.50 - (-0.05) = $10.45 /bu
Max loss from current spot = (9.82 - 8.95) * 15,000 = $12,975
Max gain from current spot = (10.45 - 9.82) * 15,000 = $9,450

Interpretation: soy collar costs a bit more but buys a meaningful floor. Note how the greater absolute price level scales P&L; collar sizing must reflect the business' risk tolerance, not just percent moves.

Practical implementation tips and gotchas

Unit conventions — confirm that option premiums are quoted per bushel and that your contract size matches (micro contracts change the multiplier).
Net credit vs net debit — if call premium > put premium you receive a net credit; you still have obligations and margin & collateral risk on the short call leg.
Margin & collateral — short calls on futures usually require margin. Ensure you have working capital for margin calls and that your spreadsheet flags required initial margin (you can paste margins from your broker).
Rollover logic — options expire. Build a simple calendar reminder: if DTE < X (e.g., 10 days), show a “roll” recommendation cell that computes cost to roll to the next expiry.
Liquidity — wide bid/ask spreads on deep OTM options can make “zero‑cost collars” deceptive. Always use mid quotes and be conservative about execution slippage.
Tax treatment (U.S.) — options on futures are typically treated under Section 1256 (60/40 capital gains) but consult your tax advisor. Accounting for tax can materially affect hedge choice for long-term producers.

Monitoring and dynamic adjustments (2026 best practices)

Set up these monitoring cells in your sheet:

Current mid-market put/call premiums (pull via API or paste daily)
Implied vol snapshot — helps detect cheap vs expensive protection windows
Profit & loss table showing outcomes across a range of settlement prices (e.g., a table from 50% to 150% of spot)
Rolling cost calculation — compute the cost to roll both legs, including bid/ask and expected commissions

Advanced: add a small script or Google Sheets App Script that fetches live option prices from your broker API. In 2026, many brokers provide lightweight REST endpoints; automating quote capture reduces human error when you size collars quickly after a weather shock.

When not to use collars — and alternatives

When you cannot post margin for the short call leg — consider buying puts only (costlier but no short obligation).
If implied vol is extremely high (put premiums expensive) — consider layered hedges or using minimum price contracts from processors.
If your exposure is small and contract granularity is poor — use micro contracts or OTC bilateral deals where appropriate.

Pro tip: Zero-cost collars look attractive but can leave you exposed to sharp rallies or backwardation effects. Run both the worst‑case and best‑case P&L scenarios in the spreadsheet before committing.

Risk management checklist before you execute

Confirm contract and unit conventions (micro vs standard).
Verify bid/ask and use mid as a starting point; prepare for slippage.
Check margin and collateral requirements for short options on futures.
Run the spreadsheet sensitivity for ±10–20% moves in the underlying.
Tag who is authorized to trade and who will monitor roll/expiry.

Final thoughts — collars in the 2026 toolkit

Collars remain one of the most practical, low-friction hedges for producers, processors and commodity traders. With the wider availability of smaller contracts, improved data feeds and brokerage APIs in 2025–2026, building a disciplined collar program with a spreadsheet is both achievable and repeatable.

Use the template to: normalize contract sizes, stress-test strike choices under different implied vol regimes, and track the true economic floor and capped upside of every hedged tranche. The examples above give you a template to adapt to your balance sheet.

Call to action

If you want the ready‑to-use Excel/Google Sheets template used in this article (including the Black‑76 cells, P&L table and roll logic), download the template or request a customized version sized to your exposure. Click the download link, or contact our hedging desk for a 30‑minute configuration call to match strikes, expiries and tax considerations to your business.

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