AOM Collar Strategy
AOM (iShares Core 40/60 Moderate Allocation ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The iShares Core 40/60 Moderate Allocation ETF seeks to track the investment results of an index composed of a portfolio of underlying equity and fixed income funds intended to represent a moderate target risk allocation strategy.
AOM (iShares Core 40/60 Moderate Allocation ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.73B, a beta of 0.77 versus the broader market, a 52-week range of 44.2-49.57, average daily share volume of 154K, a public-listing history dating back to 2008. These structural characteristics shape how AOM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.77 places AOM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AOM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on AOM?
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 AOM snapshot
As of May 15, 2026, spot at $49.03, ATM IV 20.80%, IV rank 5.73%, expected move 5.96%. The collar on AOM 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 AOM specifically: IV regime affects collar pricing on both sides; compressed AOM IV at 20.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.96% (roughly $2.92 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 AOM expiries trade a higher absolute premium for lower per-day decay. Position sizing on AOM should anchor to the underlying notional of $49.03 per share and to the trader's directional view on AOM etf.
AOM collar setup
The AOM 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 AOM near $49.03, the first option leg uses a $51.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AOM 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 AOM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $49.03 | long |
| Sell 1 | Call | $51.00 | $0.81 |
| Buy 1 | Put | $47.00 | $0.93 |
AOM collar risk and reward
- Net Premium / Debit
- -$4,915.00
- Max Profit (per contract)
- $185.00
- Max Loss (per contract)
- -$215.00
- Breakeven(s)
- $49.15
- Risk / Reward Ratio
- 0.860
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.
AOM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on AOM. 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% | -$215.00 |
| $10.85 | -77.9% | -$215.00 |
| $21.69 | -55.8% | -$215.00 |
| $32.53 | -33.7% | -$215.00 |
| $43.37 | -11.5% | -$215.00 |
| $54.21 | +10.6% | +$185.00 |
| $65.05 | +32.7% | +$185.00 |
| $75.89 | +54.8% | +$185.00 |
| $86.73 | +76.9% | +$185.00 |
| $97.57 | +99.0% | +$185.00 |
When traders use collar on AOM
Collars on AOM hedge an existing long AOM 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.
AOM thesis for this collar
The market-implied 1-standard-deviation range for AOM extends from approximately $46.11 on the downside to $51.95 on the upside. A AOM collar hedges an existing long AOM 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 AOM IV rank near 5.73% 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 AOM at 20.80%. As a Financial Services name, AOM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AOM-specific events.
AOM 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. AOM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AOM alongside the broader basket even when AOM-specific fundamentals are unchanged. Always rebuild the position from current AOM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on AOM?
- A collar on AOM is the collar strategy applied to AOM (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 AOM etf trading near $49.03, the strikes shown on this page are snapped to the nearest listed AOM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AOM 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 AOM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 20.80%), the computed maximum profit is $185.00 per contract and the computed maximum loss is -$215.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AOM collar?
- The breakeven for the AOM collar priced on this page is roughly $49.15 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 AOM market-implied 1-standard-deviation expected move is approximately 5.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on AOM?
- Collars on AOM hedge an existing long AOM 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 AOM implied volatility affect this collar?
- AOM ATM IV is at 20.80% with IV rank near 5.73%, 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.