DES Collar Strategy
DES (WisdomTree U.S. SmallCap Dividend Fund), in the Financial Services sector, (Asset Management - Income 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 - Income, with a market capitalization of approximately $2.12B, a beta of 0.91 versus the broader market, a 52-week range of 31.75-41.85, average daily share volume of 101K, 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 0.91 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 November 13, 2026, spot at $39.27. The collar on DES below is built from the November 13, 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 rank is unavailable in the current snapshot, so regime-based timing for DES is inferred from ATM IV alone. 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 $39.27 per share and to the trader's directional view on DES etf.
DES collar setup
The DES collar below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With DES at $39.27 on that close, the first option leg uses a $41.00 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 | $39.27 | long |
| Sell 1 | Call | $41.00 | $0.54 |
| Buy 1 | Put | $37.00 | $0.34 |
DES collar risk and reward
- Net Premium / Debit
- -$3,907.00
- Max Profit (per contract)
- $193.00
- Max Loss (per contract)
- -$207.00
- Breakeven(s)
- $39.07
- Risk / Reward Ratio
- 0.932
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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$207.00 |
| $8.69 | -77.9% | -$207.00 |
| $17.37 | -55.8% | -$207.00 |
| $26.06 | -33.7% | -$207.00 |
| $34.74 | -11.5% | -$207.00 |
| $43.42 | +10.6% | +$193.00 |
| $52.10 | +32.7% | +$193.00 |
| $60.78 | +54.8% | +$193.00 |
| $69.46 | +76.9% | +$193.00 |
| $78.15 | +99.0% | +$193.00 |
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
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. 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 $39.27 on the November 13, 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 November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV the current ATM IV), the computed maximum profit is $193.00 per contract and the computed maximum loss is -$207.00 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 $39.07 at expiration, derived from the November 13, 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.
- 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?
- Current DES ATM IV is the current ATM IV; IV rank context is unavailable in the current snapshot.