DBA Collar Strategy
DBA (Invesco DB Agriculture Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Invesco DB Agriculture (Fund) seeks to track changes, whether positive or negative, in the level of the DBIQ Diversified Agriculture Index Excess Return (DBIQ Diversified Agriculture Index ER or Index) plus the interest income from the Fund's holdings of primarily US Treasury securities and money market income less the Fund's expenses. The Fund is designed for investors who want a cost-effective and convenient way to invest in commodity futures. The Index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. You cannot invest directly in the Index. The Fund and the Index are rebalanced and reconstituted annually in November.This Fund is not suitable for all investors due to the speculative nature of an investment based upon the Fund's trading which takes place in very volatile markets. Because an investment in futures contracts is volatile, such frequency in the movement in market prices of the underlying futures contracts could cause large losses.
DBA (Invesco DB Agriculture Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $792.9M, a beta of 0.33 versus the broader market, a 52-week range of 25.4-28.84, average daily share volume of 1.6M, a public-listing history dating back to 2007. These structural characteristics shape how DBA etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.33 indicates DBA has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DBA pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DBA?
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 DBA snapshot
As of May 15, 2026, spot at $27.80, ATM IV 18.00%, IV rank 60.72%, expected move 5.16%. The collar on DBA 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 DBA specifically: IV regime affects collar pricing on both sides; mid-range DBA IV at 18.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.16% (roughly $1.43 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 DBA expiries trade a higher absolute premium for lower per-day decay. Position sizing on DBA should anchor to the underlying notional of $27.80 per share and to the trader's directional view on DBA etf.
DBA collar setup
The DBA 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 DBA near $27.80, the first option leg uses a $29.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DBA 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 DBA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $27.80 | long |
| Sell 1 | Call | $29.00 | $0.23 |
| Buy 1 | Put | $26.00 | $0.10 |
DBA collar risk and reward
- Net Premium / Debit
- -$2,767.50
- Max Profit (per contract)
- $132.50
- Max Loss (per contract)
- -$167.50
- Breakeven(s)
- $27.68
- Risk / Reward Ratio
- 0.791
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.
DBA collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DBA. 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% | -$167.50 |
| $6.16 | -77.9% | -$167.50 |
| $12.30 | -55.8% | -$167.50 |
| $18.45 | -33.6% | -$167.50 |
| $24.59 | -11.5% | -$167.50 |
| $30.74 | +10.6% | +$132.50 |
| $36.88 | +32.7% | +$132.50 |
| $43.03 | +54.8% | +$132.50 |
| $49.18 | +76.9% | +$132.50 |
| $55.32 | +99.0% | +$132.50 |
When traders use collar on DBA
Collars on DBA hedge an existing long DBA 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.
DBA thesis for this collar
The market-implied 1-standard-deviation range for DBA extends from approximately $26.37 on the downside to $29.23 on the upside. A DBA collar hedges an existing long DBA 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 DBA IV rank near 60.72% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on DBA should anchor more to the directional view and the expected-move geometry. As a Financial Services name, DBA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DBA-specific events.
DBA 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. DBA positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DBA alongside the broader basket even when DBA-specific fundamentals are unchanged. Always rebuild the position from current DBA chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DBA?
- A collar on DBA is the collar strategy applied to DBA (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 DBA etf trading near $27.80, the strikes shown on this page are snapped to the nearest listed DBA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DBA 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 DBA collar priced from the end-of-day chain at a 30-day expiry (ATM IV 18.00%), the computed maximum profit is $132.50 per contract and the computed maximum loss is -$167.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DBA collar?
- The breakeven for the DBA collar priced on this page is roughly $27.68 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 DBA market-implied 1-standard-deviation expected move is approximately 5.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DBA?
- Collars on DBA hedge an existing long DBA 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 DBA implied volatility affect this collar?
- DBA ATM IV is at 18.00% with IV rank near 60.72%, 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.