DDM Collar Strategy
DDM (ProShares - Ultra Dow30), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The ProShares Ultra Dow30 is designed to generate daily investment results that, before the deduction of fees and expenses, match two times (2x) the daily performance of the Dow Jones Industrial Average.
DDM (ProShares - Ultra Dow30) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $521.3M, a beta of 1.72 versus the broader market, a 52-week range of 47.155-66.38, average daily share volume of 220K, a public-listing history dating back to 2006. These structural characteristics shape how DDM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.72 indicates DDM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. DDM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DDM?
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 DDM snapshot
As of June 30, 2026, spot at $65.43, ATM IV 25.40%, IV rank 22.03%, expected move 7.28%. The collar on DDM 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 DDM specifically: IV regime affects collar pricing on both sides; compressed DDM IV at 25.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.28% (roughly $4.76 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 DDM expiries trade a higher absolute premium for lower per-day decay. Position sizing on DDM should anchor to the underlying notional of $65.43 per share and to the trader's directional view on DDM etf.
DDM collar setup
The DDM 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 DDM near $65.43, the first option leg uses a $70.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DDM 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 DDM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $65.43 | long |
| Sell 1 | Call | $70.00 | $0.13 |
| Buy 1 | Put | $62.00 | $0.53 |
DDM collar risk and reward
- Net Premium / Debit
- -$6,582.50
- Max Profit (per contract)
- $417.50
- Max Loss (per contract)
- -$382.50
- Breakeven(s)
- $65.83
- Risk / Reward Ratio
- 1.092
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.
DDM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DDM. 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% | -$382.50 |
| $14.48 | -77.9% | -$382.50 |
| $28.94 | -55.8% | -$382.50 |
| $43.41 | -33.7% | -$382.50 |
| $57.87 | -11.5% | -$382.50 |
| $72.34 | +10.6% | +$417.50 |
| $86.80 | +32.7% | +$417.50 |
| $101.27 | +54.8% | +$417.50 |
| $115.74 | +76.9% | +$417.50 |
| $130.20 | +99.0% | +$417.50 |
When traders use collar on DDM
Collars on DDM hedge an existing long DDM 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.
DDM thesis for this collar
The market-implied 1-standard-deviation range for DDM extends from approximately $60.67 on the downside to $70.19 on the upside. A DDM collar hedges an existing long DDM 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 DDM IV rank near 22.03% 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 DDM at 25.40%. As a Financial Services name, DDM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DDM-specific events.
DDM 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. DDM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DDM alongside the broader basket even when DDM-specific fundamentals are unchanged. Always rebuild the position from current DDM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DDM?
- A collar on DDM is the collar strategy applied to DDM (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 DDM etf trading near $65.43, the strikes shown on this page are snapped to the nearest listed DDM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DDM 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 DDM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.40%), the computed maximum profit is $417.50 per contract and the computed maximum loss is -$382.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DDM collar?
- The breakeven for the DDM collar priced on this page is roughly $65.83 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 DDM market-implied 1-standard-deviation expected move is approximately 7.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DDM?
- Collars on DDM hedge an existing long DDM 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 DDM implied volatility affect this collar?
- DDM ATM IV is at 25.40% with IV rank near 22.03%, 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.