BITO Collar Strategy
BITO (ProShares - Bitcoin ETF), in the Financial Services sector, (Asset Management - Cryptocurrency industry), listed on AMEX.
BITO is the first ETF to target the performance of bitcoin.
BITO (ProShares - Bitcoin ETF) trades in the Financial Services sector, specifically Asset Management - Cryptocurrency, with a market capitalization of approximately $1.86B, a beta of 1.74 versus the broader market, a 52-week range of 8.61-23.63, average daily share volume of 123.0M, a public-listing history dating back to 2021. These structural characteristics shape how BITO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.74 indicates BITO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. BITO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on BITO?
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 BITO snapshot
As of May 15, 2026, spot at $10.80, ATM IV 34.87%, IV rank 13.45%, expected move 10.00%. The collar on BITO 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 28-day expiry.
Why this collar structure on BITO specifically: IV regime affects collar pricing on both sides; compressed BITO IV at 34.87% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.00% (roughly $1.08 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BITO expiries trade a higher absolute premium for lower per-day decay. Position sizing on BITO should anchor to the underlying notional of $10.80 per share and to the trader's directional view on BITO etf.
BITO collar setup
The BITO 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 BITO near $10.80, the first option leg uses a $11.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BITO chain at a 28-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 BITO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $10.80 | long |
| Sell 1 | Call | $11.50 | $0.17 |
| Buy 1 | Put | $10.50 | $0.27 |
BITO collar risk and reward
- Net Premium / Debit
- -$1,090.00
- Max Profit (per contract)
- $60.00
- Max Loss (per contract)
- -$40.00
- Breakeven(s)
- $10.90
- Risk / Reward Ratio
- 1.500
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.
BITO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on BITO. 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 | -99.9% | -$40.00 |
| $2.40 | -77.8% | -$40.00 |
| $4.78 | -55.7% | -$40.00 |
| $7.17 | -33.6% | -$40.00 |
| $9.56 | -11.5% | -$40.00 |
| $11.94 | +10.6% | +$60.00 |
| $14.33 | +32.7% | +$60.00 |
| $16.72 | +54.8% | +$60.00 |
| $19.10 | +76.9% | +$60.00 |
| $21.49 | +99.0% | +$60.00 |
When traders use collar on BITO
Collars on BITO hedge an existing long BITO 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.
BITO thesis for this collar
The market-implied 1-standard-deviation range for BITO extends from approximately $9.72 on the downside to $11.88 on the upside. A BITO collar hedges an existing long BITO 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 BITO IV rank near 13.45% 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 BITO at 34.87%. As a Financial Services name, BITO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BITO-specific events.
BITO 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. BITO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BITO alongside the broader basket even when BITO-specific fundamentals are unchanged. Always rebuild the position from current BITO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on BITO?
- A collar on BITO is the collar strategy applied to BITO (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 BITO etf trading near $10.80, the strikes shown on this page are snapped to the nearest listed BITO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BITO 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 BITO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 34.87%), the computed maximum profit is $60.00 per contract and the computed maximum loss is -$40.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a BITO collar?
- The breakeven for the BITO collar priced on this page is roughly $10.90 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 BITO market-implied 1-standard-deviation expected move is approximately 10.00%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on BITO?
- Collars on BITO hedge an existing long BITO 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 BITO implied volatility affect this collar?
- BITO ATM IV is at 34.87% with IV rank near 13.45%, 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.