How are DES 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 DES collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.50%), the computed maximum profit is $227.00 per contract and the computed maximum loss is -$173.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DES collar?

The breakeven for the DES collar priced on this page is roughly $41.73 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The DES market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DES implied volatility affect this collar?

DES ATM IV is at 17.50% with IV rank near 5.00%, 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.

DES Collar Strategy

DES (WisdomTree U.S. SmallCap Dividend Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.

DES offers a different choice amid the cacophony of many US small-cap ETFs, as it is a fund focused on yield. DES' strategy does indeed provide higher dividend yield than the market by overweighting dividend-heavy sectors. DES also leans toward the micro-cap side of the small-cap space. Index constituents are based on the remaining market capitalization of the WisdomTree US Dividend Index the dividend-paying universe of companies in the U.S. stock market after the 300 largest companies are removed. Companies comprising the bottom 25% of the remaining market capitalization are selected for inclusion. The Underlying Index is rebalanced annually.

DES (WisdomTree U.S. SmallCap Dividend Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.22B, a beta of 0.90 versus the broader market, a 52-week range of 31.75-41.85, average daily share volume of 142K, a public-listing history dating back to 2006, approximately 4K full-time employees. These structural characteristics shape how DES etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.90 places DES roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DES pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on DES?

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.

DES snapshot

As of August 14, 2026, spot at $41.65, ATM IV 17.50%, IV rank 5.00%, expected move 5.02%. The collar on DES below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this collar structure on DES specifically: IV regime affects collar pricing on both sides; compressed DES 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 $2.09 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DES expiries trade a higher absolute premium for lower per-day decay. Position sizing on DES should anchor to the underlying notional of $41.65 per share and to the trader's directional view on DES etf.

DES collar setup

The DES collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With DES at $41.65 on that close, the first option leg uses a $44.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DES chain at a 35-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 DES shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$41.65	long
Sell 1	Call	$44.00	$0.32
Buy 1	Put	$40.00	$0.40

DES collar risk and reward

Net Premium / Debit: -$4,173.00
Max Profit (per contract): $227.00
Max Loss (per contract): -$173.00
Breakeven(s): $41.73
Risk / Reward Ratio: 1.312

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.

DES collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on DES. 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%	-$173.00
$9.22	-77.9%	-$173.00
$18.43	-55.8%	-$173.00
$27.63	-33.7%	-$173.00
$36.84	-11.5%	-$173.00
$46.05	+10.6%	+$227.00
$55.26	+32.7%	+$227.00
$64.47	+54.8%	+$227.00
$73.67	+76.9%	+$227.00
$82.88	+99.0%	+$227.00

When traders use collar on DES

Collars on DES hedge an existing long DES 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.

DES thesis for this collar

The market-implied 1-standard-deviation range for DES extends from approximately $39.56 on the downside to $43.74 on the upside. A DES collar hedges an existing long DES 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 DES IV rank near 5.00% 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 DES at 17.50%. As a Financial Services name, DES options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DES-specific events.

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

Frequently asked questions

What is a collar on DES?: A collar on DES is the collar strategy applied to DES (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 DES etf at $41.65 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed DES chain strike and the premiums come straight from that session's bid/ask midpoint.
How are DES 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 DES collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.50%), the computed maximum profit is $227.00 per contract and the computed maximum loss is -$173.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DES collar?: The breakeven for the DES collar priced on this page is roughly $41.73 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The DES market-implied 1-standard-deviation expected move in the same options snapshot 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 DES?: Collars on DES hedge an existing long DES 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 DES implied volatility affect this collar?: DES ATM IV is at 17.50% with IV rank near 5.00%, 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.