How are DUG 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 DUG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 44.60%), the computed maximum profit is $82.50 per contract and the computed maximum loss is -$117.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DUG collar?

The breakeven for the DUG collar priced on this page is roughly $21.17 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 DUG market-implied 1-standard-deviation expected move is approximately 12.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DUG implied volatility affect this collar?

DUG ATM IV is at 44.60% with IV rank near 5.75%, 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.

DUG Collar Strategy

DUG (ProShares UltraShort Energy), in the Financial Services sector, (Asset Management industry), listed on AMEX.

DUG provides (-2x) inverse exposure to the daily performance of the S&P Energy Select Sector Index, a market-cap-weighted index of US oil and gas companies. The funds concentrated portfolio typically includes firms engaged in oil and gas exploration and production, integrated oil and gas, equipment for oil as well as renewable energy, pipelines, and alternative fuel producers. As a levered product with daily resets, DUG is not a buy-and-hold investment and should not be expected to provide index leverage returns greater than a one-day period. Prior to Mar. 20, 2023, the fund was called ProShares UltraShort Energy that tracked the Dow Jones U.S. Oil & Gas Index.

DUG (ProShares UltraShort Energy) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $10.7M, a beta of -0.07 versus the broader market, a 52-week range of 15.65-38.27, average daily share volume of 145K, a public-listing history dating back to 2007. These structural characteristics shape how DUG etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -0.07 indicates DUG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DUG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on DUG?

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 DUG snapshot

As of June 29, 2026, spot at $20.98, ATM IV 44.60%, IV rank 5.75%, expected move 12.79%. The collar on DUG 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 18-day expiry.

Why this collar structure on DUG specifically: IV regime affects collar pricing on both sides; compressed DUG IV at 44.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.79% (roughly $2.68 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DUG expiries trade a higher absolute premium for lower per-day decay. Position sizing on DUG should anchor to the underlying notional of $20.98 per share and to the trader's directional view on DUG etf.

DUG collar setup

The DUG 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 DUG near $20.98, the first option leg uses a $22.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DUG chain at a 18-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 DUG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$20.98	long
Sell 1	Call	$22.00	$0.33
Buy 1	Put	$20.00	$0.53

DUG collar risk and reward

Net Premium / Debit: -$2,117.50
Max Profit (per contract): $82.50
Max Loss (per contract): -$117.50
Breakeven(s): $21.17
Risk / Reward Ratio: 0.702

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.

DUG collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on DUG. 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%	-$117.50
$4.65	-77.8%	-$117.50
$9.29	-55.7%	-$117.50
$13.92	-33.6%	-$117.50
$18.56	-11.5%	-$117.50
$23.20	+10.6%	+$82.50
$27.84	+32.7%	+$82.50
$32.47	+54.8%	+$82.50
$37.11	+76.9%	+$82.50
$41.75	+99.0%	+$82.50

When traders use collar on DUG

Collars on DUG hedge an existing long DUG 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.

DUG thesis for this collar

The market-implied 1-standard-deviation range for DUG extends from approximately $18.30 on the downside to $23.66 on the upside. A DUG collar hedges an existing long DUG 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 DUG IV rank near 5.75% 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 DUG at 44.60%. As a Financial Services name, DUG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DUG-specific events.

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

Frequently asked questions

What is a collar on DUG?: A collar on DUG is the collar strategy applied to DUG (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 DUG etf trading near $20.98, the strikes shown on this page are snapped to the nearest listed DUG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DUG 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 DUG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 44.60%), the computed maximum profit is $82.50 per contract and the computed maximum loss is -$117.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DUG collar?: The breakeven for the DUG collar priced on this page is roughly $21.17 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 DUG market-implied 1-standard-deviation expected move is approximately 12.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on DUG?: Collars on DUG hedge an existing long DUG 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 DUG implied volatility affect this collar?: DUG ATM IV is at 44.60% with IV rank near 5.75%, 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.