How are DBC 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 DBC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 17.50%), the computed maximum profit is $142.00 per contract and the computed maximum loss is -$158.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DBC collar?

The breakeven for the DBC collar priced on this page is roughly $26.58 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 DBC market-implied 1-standard-deviation expected move is approximately 5.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DBC implied volatility affect this collar?

DBC ATM IV is at 17.50% with IV rank near 7.23%, 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.

DBC Collar Strategy

DBC (Invesco DB Commodity Index Tracking Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco DB Commodity Index Tracking Fund (DBC) aims to replicate the performance, both positive and negative, of the DBIQ Optimum Yield Diversified Commodity Index Excess Return (DBIQ Opt Yield Diversified Comm Index ER or Index). Beyond merely tracking the index, the Fund also incorporates interest income derived primarily from its holdings of U.S. Treasury securities and money market instruments, offset by the Fund's operating expenses. This Fund is designed to provide investors with an accessible and efficient vehicle for gaining exposure to commodity futures. The underlying Index is a systematic, rules-based benchmark comprising futures contracts on fourteen of the world's most actively traded and economically significant physical commodities. Both the Fund and its corresponding Index undergo annual rebalancing and reconstitution each November.

DBC (Invesco DB Commodity Index Tracking Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.88B, a trailing P/E of 4.89, a beta of 1.03 versus the broader market, a 52-week range of 21.59-31.79, average daily share volume of 1.5M, a public-listing history dating back to 2006. These structural characteristics shape how DBC etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.03 places DBC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 4.89 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. DBC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on DBC?

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 DBC snapshot

As of June 30, 2026, spot at $26.66, ATM IV 17.50%, IV rank 7.23%, expected move 5.02%. The collar on DBC 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 17-day expiry.

Why this collar structure on DBC specifically: IV regime affects collar pricing on both sides; compressed DBC IV at 17.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.02% (roughly $1.34 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DBC expiries trade a higher absolute premium for lower per-day decay. Position sizing on DBC should anchor to the underlying notional of $26.66 per share and to the trader's directional view on DBC etf.

DBC collar setup

The DBC 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 DBC near $26.66, 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 DBC chain at a 17-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 DBC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$26.66	long
Sell 1	Call	$28.00	$0.10
Buy 1	Put	$25.00	$0.02

DBC collar risk and reward

Net Premium / Debit: -$2,658.00
Max Profit (per contract): $142.00
Max Loss (per contract): -$158.00
Breakeven(s): $26.58
Risk / Reward Ratio: 0.899

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.

DBC collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on DBC. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$158.00
$5.90	-77.9%	-$158.00
$11.80	-55.7%	-$158.00
$17.69	-33.6%	-$158.00
$23.58	-11.5%	-$158.00
$29.48	+10.6%	+$142.00
$35.37	+32.7%	+$142.00
$41.26	+54.8%	+$142.00
$47.16	+76.9%	+$142.00
$53.05	+99.0%	+$142.00

When traders use collar on DBC

Collars on DBC hedge an existing long DBC 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.

DBC thesis for this collar

The market-implied 1-standard-deviation range for DBC extends from approximately $25.32 on the downside to $28.00 on the upside. A DBC collar hedges an existing long DBC 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 DBC IV rank near 7.23% 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 DBC at 17.50%. As a Financial Services name, DBC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DBC-specific events.

DBC 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. DBC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DBC alongside the broader basket even when DBC-specific fundamentals are unchanged. Always rebuild the position from current DBC chain quotes before placing a trade.

Frequently asked questions

What is a collar on DBC?: A collar on DBC is the collar strategy applied to DBC (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 DBC etf trading near $26.66, the strikes shown on this page are snapped to the nearest listed DBC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DBC 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 DBC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 17.50%), the computed maximum profit is $142.00 per contract and the computed maximum loss is -$158.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DBC collar?: The breakeven for the DBC collar priced on this page is roughly $26.58 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 DBC market-implied 1-standard-deviation expected move is approximately 5.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on DBC?: Collars on DBC hedge an existing long DBC 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 DBC implied volatility affect this collar?: DBC ATM IV is at 17.50% with IV rank near 7.23%, 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.