DJD Collar Strategy
DJD (Invesco Dow Jones Industrial Average Dividend ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Invesco Dow Jones Industrial Average Dividend ETF (Fund) is based on the Dow Jones Industrial Average Yield Weighted (Index). The Fund will invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to provide exposure to dividend-paying equity securities in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. Only securities with consistent dividend payments over the previous 12 months are included in the Index. The Fund and the Index are rebalanced semiannually.
DJD (Invesco Dow Jones Industrial Average Dividend ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $451.2M, a beta of 0.62 versus the broader market, a 52-week range of 50.73-62.81, average daily share volume of 45K, a public-listing history dating back to 2015. These structural characteristics shape how DJD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.62 indicates DJD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DJD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DJD?
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 DJD snapshot
As of May 15, 2026, spot at $60.77, ATM IV 12.00%, IV rank 2.50%, expected move 3.44%. The collar on DJD 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 63-day expiry.
Why this collar structure on DJD specifically: IV regime affects collar pricing on both sides; compressed DJD IV at 12.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 3.44% (roughly $2.09 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DJD expiries trade a higher absolute premium for lower per-day decay. Position sizing on DJD should anchor to the underlying notional of $60.77 per share and to the trader's directional view on DJD etf.
DJD collar setup
The DJD 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 DJD near $60.77, the first option leg uses a $64.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DJD chain at a 63-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 DJD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $60.77 | long |
| Sell 1 | Call | $64.00 | $0.32 |
| Buy 1 | Put | $58.00 | $0.40 |
DJD collar risk and reward
- Net Premium / Debit
- -$6,085.00
- Max Profit (per contract)
- $315.00
- Max Loss (per contract)
- -$285.00
- Breakeven(s)
- $60.85
- Risk / Reward Ratio
- 1.105
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.
DJD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DJD. 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% | -$285.00 |
| $13.45 | -77.9% | -$285.00 |
| $26.88 | -55.8% | -$285.00 |
| $40.32 | -33.7% | -$285.00 |
| $53.75 | -11.5% | -$285.00 |
| $67.19 | +10.6% | +$315.00 |
| $80.62 | +32.7% | +$315.00 |
| $94.06 | +54.8% | +$315.00 |
| $107.49 | +76.9% | +$315.00 |
| $120.93 | +99.0% | +$315.00 |
When traders use collar on DJD
Collars on DJD hedge an existing long DJD 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.
DJD thesis for this collar
The market-implied 1-standard-deviation range for DJD extends from approximately $58.68 on the downside to $62.86 on the upside. A DJD collar hedges an existing long DJD 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 DJD IV rank near 2.50% 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 DJD at 12.00%. As a Financial Services name, DJD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DJD-specific events.
DJD 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. DJD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DJD alongside the broader basket even when DJD-specific fundamentals are unchanged. Always rebuild the position from current DJD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DJD?
- A collar on DJD is the collar strategy applied to DJD (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 DJD etf trading near $60.77, the strikes shown on this page are snapped to the nearest listed DJD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DJD 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 DJD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 12.00%), the computed maximum profit is $315.00 per contract and the computed maximum loss is -$285.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DJD collar?
- The breakeven for the DJD collar priced on this page is roughly $60.85 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 DJD market-implied 1-standard-deviation expected move is approximately 3.44%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DJD?
- Collars on DJD hedge an existing long DJD 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 DJD implied volatility affect this collar?
- DJD ATM IV is at 12.00% with IV rank near 2.50%, 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.