How are EDC 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 EDC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 109.00%), the computed maximum profit is $409.00 per contract and the computed maximum loss is -$591.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a EDC collar?

The breakeven for the EDC collar priced on this page is roughly $90.91 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 EDC market-implied 1-standard-deviation expected move is approximately 31.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current EDC implied volatility affect this collar?

EDC ATM IV is at 109.00% with IV rank near 74.04%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

EDC Collar Strategy

EDC (Direxion Daily MSCI Emerging Markets Bull 3X Shares), in the Financial Services sector, (Asset Management industry), listed on AMEX.

EDC is an aggressive one-day bet on the widely followed MSCI Emerging Markets Index. The fund promises to provide 300% of the return of the index, which is a cap-weighted composite of emerging markets firms covering 85% of the market cap in those countries every day. This means heavy exposure to financials and technology, as well as to firms in China, South Korea, and Taiwan. As with most leveraged funds, it's designed to provide this exposure only for one trading day. Holding the fund for longer than one day will expose investors to the effects of compounding and may create significant drift between the expected return and what is actually realized. Also, consider that EDC is designed to be a short-term trading vehicle, not a long-term investment, so trading costs have a bigger impact than the expense ratio.

EDC (Direxion Daily MSCI Emerging Markets Bull 3X Shares) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $175.8M, a beta of 2.50 versus the broader market, a 52-week range of 38.08-103.88, average daily share volume of 139K, a public-listing history dating back to 2008. These structural characteristics shape how EDC etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.50 indicates EDC has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. EDC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on EDC?

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 EDC snapshot

As of June 30, 2026, spot at $88.66, ATM IV 109.00%, IV rank 74.04%, expected move 31.25%. The collar on EDC 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 EDC specifically: IV regime affects collar pricing on both sides; elevated EDC IV at 109.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 31.25% (roughly $27.71 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 EDC expiries trade a higher absolute premium for lower per-day decay. Position sizing on EDC should anchor to the underlying notional of $88.66 per share and to the trader's directional view on EDC etf.

EDC collar setup

The EDC 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 EDC near $88.66, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EDC 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 EDC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$88.66	long
Sell 1	Call	$95.00	$5.05
Buy 1	Put	$85.00	$7.30

EDC collar risk and reward

Net Premium / Debit: -$9,091.00
Max Profit (per contract): $409.00
Max Loss (per contract): -$591.00
Breakeven(s): $90.91
Risk / Reward Ratio: 0.692

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.

EDC collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on EDC. 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%	-$591.00
$19.61	-77.9%	-$591.00
$39.21	-55.8%	-$591.00
$58.82	-33.7%	-$591.00
$78.42	-11.6%	-$591.00
$98.02	+10.6%	+$409.00
$117.62	+32.7%	+$409.00
$137.22	+54.8%	+$409.00
$156.83	+76.9%	+$409.00
$176.43	+99.0%	+$409.00

When traders use collar on EDC

Collars on EDC hedge an existing long EDC 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.

EDC thesis for this collar

The market-implied 1-standard-deviation range for EDC extends from approximately $60.95 on the downside to $116.37 on the upside. A EDC collar hedges an existing long EDC 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 EDC IV rank near 74.04% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on EDC at 109.00%. As a Financial Services name, EDC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EDC-specific events.

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

Frequently asked questions

What is a collar on EDC?: A collar on EDC is the collar strategy applied to EDC (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 EDC etf trading near $88.66, the strikes shown on this page are snapped to the nearest listed EDC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are EDC 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 EDC collar priced from the end-of-day chain at a 30-day expiry (ATM IV 109.00%), the computed maximum profit is $409.00 per contract and the computed maximum loss is -$591.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a EDC collar?: The breakeven for the EDC collar priced on this page is roughly $90.91 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 EDC market-implied 1-standard-deviation expected move is approximately 31.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on EDC?: Collars on EDC hedge an existing long EDC 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 EDC implied volatility affect this collar?: EDC ATM IV is at 109.00% with IV rank near 74.04%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.