EDZ Collar Strategy
EDZ (Direxion Daily MSCI Emerging Markets Bear 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily MSCI Emerging Markets Bear 3X ETF (EDZ) is structured to deliver daily investment outcomes that reflect three times the inverse (or opposite) performance of the MSCI Emerging Markets Index. This target is measured before accounting for any fees or expenses. Investors should be aware, however, that there is no certainty these funds will consistently achieve their stated daily investment objectives.
EDZ (Direxion Daily MSCI Emerging Markets Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $6.7M, a beta of -2.22 versus the broader market, a 52-week range of 13.06-55.2, average daily share volume of 337K, a public-listing history dating back to 2008. These structural characteristics shape how EDZ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -2.22 indicates EDZ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. EDZ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on EDZ?
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 EDZ snapshot
As of June 30, 2026, spot at $14.48, ATM IV 131.70%, IV rank 73.16%, expected move 37.76%. The collar on EDZ 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 EDZ specifically: IV regime affects collar pricing on both sides; elevated EDZ IV at 131.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 37.76% (roughly $5.47 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 EDZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on EDZ should anchor to the underlying notional of $14.48 per share and to the trader's directional view on EDZ etf.
EDZ collar setup
The EDZ 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 EDZ near $14.48, the first option leg uses a $15.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EDZ 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 EDZ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $14.48 | long |
| Sell 1 | Call | $15.00 | $1.30 |
| Buy 1 | Put | $14.00 | $1.20 |
EDZ collar risk and reward
- Net Premium / Debit
- -$1,438.00
- Max Profit (per contract)
- $62.00
- Max Loss (per contract)
- -$38.00
- Breakeven(s)
- $14.38
- Risk / Reward Ratio
- 1.632
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.
EDZ collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on EDZ. 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 | -99.9% | -$38.00 |
| $3.21 | -77.8% | -$38.00 |
| $6.41 | -55.7% | -$38.00 |
| $9.61 | -33.6% | -$38.00 |
| $12.81 | -11.5% | -$38.00 |
| $16.01 | +10.6% | +$62.00 |
| $19.21 | +32.7% | +$62.00 |
| $22.41 | +54.8% | +$62.00 |
| $25.61 | +76.9% | +$62.00 |
| $28.81 | +99.0% | +$62.00 |
When traders use collar on EDZ
Collars on EDZ hedge an existing long EDZ 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.
EDZ thesis for this collar
The market-implied 1-standard-deviation range for EDZ extends from approximately $9.01 on the downside to $19.95 on the upside. A EDZ collar hedges an existing long EDZ 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 EDZ IV rank near 73.16% 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 EDZ at 131.70%. As a Financial Services name, EDZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EDZ-specific events.
EDZ 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. EDZ positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EDZ alongside the broader basket even when EDZ-specific fundamentals are unchanged. Always rebuild the position from current EDZ chain quotes before placing a trade.
Frequently asked questions
- What is a collar on EDZ?
- A collar on EDZ is the collar strategy applied to EDZ (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 EDZ etf trading near $14.48, the strikes shown on this page are snapped to the nearest listed EDZ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EDZ 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 EDZ collar priced from the end-of-day chain at a 30-day expiry (ATM IV 131.70%), the computed maximum profit is $62.00 per contract and the computed maximum loss is -$38.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EDZ collar?
- The breakeven for the EDZ collar priced on this page is roughly $14.38 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 EDZ market-implied 1-standard-deviation expected move is approximately 37.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on EDZ?
- Collars on EDZ hedge an existing long EDZ 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 EDZ implied volatility affect this collar?
- EDZ ATM IV is at 131.70% with IV rank near 73.16%, 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.