AFK Collar Strategy
AFK (VanEck Africa Index ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
VanEck Africa Index ETF (AFK) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS GDP Africa Index (MVAFKTR), which includes local listings of companies that are incorporated in Africa and listings of companies incorporated outside of Africa but that have at least 50% of their revenues/related assets in Africa.
AFK (VanEck Africa Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $120.2M, a beta of 1.12 versus the broader market, a 52-week range of 18.02-30.85, average daily share volume of 83K, a public-listing history dating back to 2008. These structural characteristics shape how AFK etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.12 places AFK roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AFK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AFK?
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 AFK snapshot
As of May 15, 2026, spot at $26.82, ATM IV 44.40%, IV rank 7.03%, expected move 12.73%. The collar on AFK 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 63-day expiry.
Why this collar structure on AFK specifically: IV regime affects collar pricing on both sides; compressed AFK IV at 44.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.73% (roughly $3.41 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AFK expiries trade a higher absolute premium for lower per-day decay. Position sizing on AFK should anchor to the underlying notional of $26.82 per share and to the trader's directional view on AFK etf.
AFK collar setup
The AFK 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 AFK near $26.82, the first option leg uses a $28.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AFK chain at a 63-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 AFK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $26.82 | long |
| Sell 1 | Call | $28.00 | $1.11 |
| Buy 1 | Put | $25.00 | $0.77 |
AFK collar risk and reward
- Net Premium / Debit
- -$2,648.00
- Max Profit (per contract)
- $152.00
- Max Loss (per contract)
- -$148.00
- Breakeven(s)
- $26.48
- Risk / Reward Ratio
- 1.027
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.
AFK collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AFK. 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% | -$148.00 |
| $5.94 | -77.9% | -$148.00 |
| $11.87 | -55.7% | -$148.00 |
| $17.80 | -33.6% | -$148.00 |
| $23.73 | -11.5% | -$148.00 |
| $29.65 | +10.6% | +$152.00 |
| $35.58 | +32.7% | +$152.00 |
| $41.51 | +54.8% | +$152.00 |
| $47.44 | +76.9% | +$152.00 |
| $53.37 | +99.0% | +$152.00 |
When traders use collar on AFK
Collars on AFK hedge an existing long AFK etf 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.
AFK thesis for this collar
The market-implied 1-standard-deviation range for AFK extends from approximately $23.41 on the downside to $30.23 on the upside. A AFK collar hedges an existing long AFK 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 AFK IV rank near 7.03% 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 AFK at 44.40%. As a Financial Services name, AFK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AFK-specific events.
AFK 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. AFK positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AFK alongside the broader basket even when AFK-specific fundamentals are unchanged. Always rebuild the position from current AFK chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AFK?
- A collar on AFK is the collar strategy applied to AFK (etf). 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 AFK etf trading near $26.82, the strikes shown on this page are snapped to the nearest listed AFK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AFK 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 AFK collar priced from the end-of-day chain at a 30-day expiry (ATM IV 44.40%), the computed maximum profit is $152.00 per contract and the computed maximum loss is -$148.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AFK collar?
- The breakeven for the AFK collar priced on this page is roughly $26.48 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 AFK market-implied 1-standard-deviation expected move is approximately 12.73%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AFK?
- Collars on AFK hedge an existing long AFK etf 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 AFK implied volatility affect this collar?
- AFK ATM IV is at 44.40% with IV rank near 7.03%, 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.