AIBU Collar Strategy
AIBU (Direxion Daily AI and Big Data Bull 2X ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Direxion Daily AI and Big Data Bull and Bear 2X Shares seek daily investment results, before fees and expenses, of 200%, or 200% of the inverse (or opposite), of the performance of the Solactive US AI & Big Data Index. There is no guarantee the funds will achieve their stated investment objectives.
AIBU (Direxion Daily AI and Big Data Bull 2X ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $30.9M, a beta of 3.96 versus the broader market, a 52-week range of 32.6-65.41, average daily share volume of 13K, a public-listing history dating back to 2024. These structural characteristics shape how AIBU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.96 indicates AIBU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. AIBU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AIBU?
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 AIBU snapshot
As of May 15, 2026, spot at $60.98, ATM IV 58.90%, IV rank 49.03%, expected move 16.89%. The collar on AIBU 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 34-day expiry.
Why this collar structure on AIBU specifically: IV regime affects collar pricing on both sides; mid-range AIBU IV at 58.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 16.89% (roughly $10.30 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AIBU expiries trade a higher absolute premium for lower per-day decay. Position sizing on AIBU should anchor to the underlying notional of $60.98 per share and to the trader's directional view on AIBU etf.
AIBU collar setup
The AIBU 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 AIBU near $60.98, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AIBU chain at a 34-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 AIBU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $60.98 | long |
| Sell 1 | Call | $65.00 | $2.75 |
| Buy 1 | Put | $60.00 | $3.73 |
AIBU collar risk and reward
- Net Premium / Debit
- -$6,195.50
- Max Profit (per contract)
- $304.50
- Max Loss (per contract)
- -$195.50
- Breakeven(s)
- $61.96
- Risk / Reward Ratio
- 1.558
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.
AIBU collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AIBU. 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% | -$195.50 |
| $13.49 | -77.9% | -$195.50 |
| $26.97 | -55.8% | -$195.50 |
| $40.46 | -33.7% | -$195.50 |
| $53.94 | -11.5% | -$195.50 |
| $67.42 | +10.6% | +$304.50 |
| $80.90 | +32.7% | +$304.50 |
| $94.38 | +54.8% | +$304.50 |
| $107.87 | +76.9% | +$304.50 |
| $121.35 | +99.0% | +$304.50 |
When traders use collar on AIBU
Collars on AIBU hedge an existing long AIBU 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.
AIBU thesis for this collar
The market-implied 1-standard-deviation range for AIBU extends from approximately $50.68 on the downside to $71.28 on the upside. A AIBU collar hedges an existing long AIBU 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 AIBU IV rank near 49.03% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on AIBU should anchor more to the directional view and the expected-move geometry. As a Financial Services name, AIBU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AIBU-specific events.
AIBU 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. AIBU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AIBU alongside the broader basket even when AIBU-specific fundamentals are unchanged. Always rebuild the position from current AIBU chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AIBU?
- A collar on AIBU is the collar strategy applied to AIBU (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 AIBU etf trading near $60.98, the strikes shown on this page are snapped to the nearest listed AIBU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AIBU 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 AIBU collar priced from the end-of-day chain at a 30-day expiry (ATM IV 58.90%), the computed maximum profit is $304.50 per contract and the computed maximum loss is -$195.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AIBU collar?
- The breakeven for the AIBU collar priced on this page is roughly $61.96 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 AIBU market-implied 1-standard-deviation expected move is approximately 16.89%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AIBU?
- Collars on AIBU hedge an existing long AIBU 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 AIBU implied volatility affect this collar?
- AIBU ATM IV is at 58.90% with IV rank near 49.03%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.