EDV Collar Strategy
EDV (Vanguard Extended Duration Treasury ETF), in the Financial Services sector, (Asset Management - Bonds industry), listed on AMEX.
This fund aims to replicate the returns of the Bloomberg U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. It operates under a passive investment strategy, using index sampling to gain comprehensive exposure to the extended-duration Treasury STRIPS market. The ETF offers a source of consistent income, backed by the superior creditworthiness of U.S. government bonds.
EDV (Vanguard Extended Duration Treasury ETF) trades in the Financial Services sector, specifically Asset Management - Bonds, with a market capitalization of approximately $4.29B, a beta of 3.41 versus the broader market, a 52-week range of 60.49-71.31, average daily share volume of 1.1M, a public-listing history dating back to 2008. These structural characteristics shape how EDV etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.41 indicates EDV has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. EDV pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on EDV?
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 EDV snapshot
As of June 30, 2026, spot at $65.30, ATM IV 15.30%, IV rank 2.18%, expected move 4.39%. The collar on EDV 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 EDV specifically: IV regime affects collar pricing on both sides; compressed EDV IV at 15.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 4.39% (roughly $2.86 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 EDV expiries trade a higher absolute premium for lower per-day decay. Position sizing on EDV should anchor to the underlying notional of $65.30 per share and to the trader's directional view on EDV etf.
EDV collar setup
The EDV 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 EDV near $65.30, the first option leg uses a $69.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EDV 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 EDV shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $65.30 | long |
| Sell 1 | Call | $69.00 | $0.02 |
| Buy 1 | Put | $62.00 | $0.06 |
EDV collar risk and reward
- Net Premium / Debit
- -$6,534.00
- Max Profit (per contract)
- $366.00
- Max Loss (per contract)
- -$334.00
- Breakeven(s)
- $65.34
- Risk / Reward Ratio
- 1.096
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.
EDV collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on EDV. 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% | -$334.00 |
| $14.45 | -77.9% | -$334.00 |
| $28.88 | -55.8% | -$334.00 |
| $43.32 | -33.7% | -$334.00 |
| $57.76 | -11.5% | -$334.00 |
| $72.20 | +10.6% | +$366.00 |
| $86.63 | +32.7% | +$366.00 |
| $101.07 | +54.8% | +$366.00 |
| $115.51 | +76.9% | +$366.00 |
| $129.94 | +99.0% | +$366.00 |
When traders use collar on EDV
Collars on EDV hedge an existing long EDV 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.
EDV thesis for this collar
The market-implied 1-standard-deviation range for EDV extends from approximately $62.44 on the downside to $68.16 on the upside. A EDV collar hedges an existing long EDV 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 EDV IV rank near 2.18% 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 EDV at 15.30%. As a Financial Services name, EDV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EDV-specific events.
EDV 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. EDV positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EDV alongside the broader basket even when EDV-specific fundamentals are unchanged. Always rebuild the position from current EDV chain quotes before placing a trade.
Frequently asked questions
- What is a collar on EDV?
- A collar on EDV is the collar strategy applied to EDV (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 EDV etf trading near $65.30, the strikes shown on this page are snapped to the nearest listed EDV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EDV 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 EDV collar priced from the end-of-day chain at a 30-day expiry (ATM IV 15.30%), the computed maximum profit is $366.00 per contract and the computed maximum loss is -$334.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EDV collar?
- The breakeven for the EDV collar priced on this page is roughly $65.34 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 EDV market-implied 1-standard-deviation expected move is approximately 4.39%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on EDV?
- Collars on EDV hedge an existing long EDV 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 EDV implied volatility affect this collar?
- EDV ATM IV is at 15.30% with IV rank near 2.18%, 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.