EDV Collar Strategy
EDV (Vanguard Extended Duration Treasury ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Seeks to track the performance of the Bloomberg U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. Passively managed using index sampling. Broad exposure to the long-term Treasury STRIPS market. Provides current income with high credit quality.
EDV (Vanguard Extended Duration Treasury ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $4.36B, a beta of 3.39 versus the broader market, a 52-week range of 61.56-71.31, average daily share volume of 1.3M, 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 3.39 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 May 15, 2026, spot at $61.42, ATM IV 13.10%, IV rank 36.65%, expected move 3.76%. 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 34-day expiry.
Why this collar structure on EDV specifically: IV regime affects collar pricing on both sides; mid-range EDV IV at 13.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 3.76% (roughly $2.31 on the underlying). The 34-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 $61.42 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 $61.42, 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 EDV chain at a 34-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 | $61.42 | long |
| Sell 1 | Call | $64.00 | $0.28 |
| Buy 1 | Put | $58.00 | $0.18 |
EDV collar risk and reward
- Net Premium / Debit
- -$6,132.00
- Max Profit (per contract)
- $268.00
- Max Loss (per contract)
- -$332.00
- Breakeven(s)
- $61.32
- Risk / Reward Ratio
- 0.807
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% | -$332.00 |
| $13.59 | -77.9% | -$332.00 |
| $27.17 | -55.8% | -$332.00 |
| $40.75 | -33.7% | -$332.00 |
| $54.33 | -11.5% | -$332.00 |
| $67.91 | +10.6% | +$268.00 |
| $81.49 | +32.7% | +$268.00 |
| $95.06 | +54.8% | +$268.00 |
| $108.64 | +76.9% | +$268.00 |
| $122.22 | +99.0% | +$268.00 |
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 $59.11 on the downside to $63.73 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 36.65% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on EDV should anchor more to the directional view and the expected-move geometry. 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 $61.42, 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 13.10%), the computed maximum profit is $268.00 per contract and the computed maximum loss is -$332.00 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 $61.32 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 3.76%; 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 13.10% with IV rank near 36.65%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.