EMLP Collar Strategy
EMLP (First Trust North American Energy Infrastructure Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The First Trust North American Energy Infrastructure Fund is an actively managed exchange-traded fund. The Fund's investment objective is to seek total return. The Fund's investment strategy emphasizes current distributions and dividends paid to shareholders. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in equity securities of companies deemed by Energy Income Partners, LLC, the Fund's investment sub-advisor, to be engaged in the energy infrastructure sector. These companies principally include U.S. and Canadian natural gas and electric utilities, corporations operating energy infrastructure assets such as pipelines or renewable energy production, utilities, publicly-traded master limited partnerships or limited liability companies taxed as partnerships ("MLPs"), MLP affiliates, and other companies that derive the majority of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries (collectively, "energy infrastructure companies"). The Fund will invest principally in energy infrastructure companies.
EMLP (First Trust North American Energy Infrastructure Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $4.07B, a beta of 0.45 versus the broader market, a 52-week range of 36.29-44.76, average daily share volume of 270K, a public-listing history dating back to 2012. These structural characteristics shape how EMLP etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.45 indicates EMLP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. EMLP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on EMLP?
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 EMLP snapshot
As of May 15, 2026, spot at $43.72, ATM IV 22.60%, IV rank 2.02%, expected move 6.48%. The collar on EMLP 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 EMLP specifically: IV regime affects collar pricing on both sides; compressed EMLP IV at 22.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.48% (roughly $2.83 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 EMLP expiries trade a higher absolute premium for lower per-day decay. Position sizing on EMLP should anchor to the underlying notional of $43.72 per share and to the trader's directional view on EMLP etf.
EMLP collar setup
The EMLP 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 EMLP near $43.72, the first option leg uses a $45.91 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EMLP 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 EMLP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $43.72 | long |
| Sell 1 | Call | $45.91 | N/A |
| Buy 1 | Put | $41.53 | N/A |
EMLP collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
EMLP collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on EMLP. 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.
When traders use collar on EMLP
Collars on EMLP hedge an existing long EMLP 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.
EMLP thesis for this collar
The market-implied 1-standard-deviation range for EMLP extends from approximately $40.89 on the downside to $46.55 on the upside. A EMLP collar hedges an existing long EMLP 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 EMLP IV rank near 2.02% 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 EMLP at 22.60%. As a Financial Services name, EMLP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EMLP-specific events.
EMLP 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. EMLP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EMLP alongside the broader basket even when EMLP-specific fundamentals are unchanged. Always rebuild the position from current EMLP chain quotes before placing a trade.
Frequently asked questions
- What is a collar on EMLP?
- A collar on EMLP is the collar strategy applied to EMLP (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 EMLP etf trading near $43.72, the strikes shown on this page are snapped to the nearest listed EMLP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EMLP 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 EMLP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EMLP collar?
- The breakeven for the EMLP collar priced on this page is no defined breakeven on the modeled curve 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 EMLP market-implied 1-standard-deviation expected move is approximately 6.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on EMLP?
- Collars on EMLP hedge an existing long EMLP 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 EMLP implied volatility affect this collar?
- EMLP ATM IV is at 22.60% with IV rank near 2.02%, 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.