ERY Collar Strategy
ERY (Direxion Daily Energy Bear 2X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily Energy Bull and Bear 2X ETFs seeks daily investment results, before fees and expenses, of 200%, or 200% of the inverse (or opposite), of the performance of the Energy Select Sector Index. There is no guarantee the funds will achieve their stated investment objectives.
ERY (Direxion Daily Energy Bear 2X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $10.5M, a beta of -0.24 versus the broader market, a 52-week range of 9.57-25.6, average daily share volume of 3.4M, a public-listing history dating back to 2008. These structural characteristics shape how ERY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.24 indicates ERY has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ERY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ERY?
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 ERY snapshot
As of May 15, 2026, spot at $10.80, ATM IV 59.80%, IV rank 8.08%, expected move 17.14%. The collar on ERY 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 ERY specifically: IV regime affects collar pricing on both sides; compressed ERY IV at 59.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 17.14% (roughly $1.85 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 ERY expiries trade a higher absolute premium for lower per-day decay. Position sizing on ERY should anchor to the underlying notional of $10.80 per share and to the trader's directional view on ERY etf.
ERY collar setup
The ERY 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 ERY near $10.80, the first option leg uses a $11.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ERY 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 ERY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $10.80 | long |
| Sell 1 | Call | $11.00 | $0.88 |
| Buy 1 | Put | $10.00 | $0.43 |
ERY collar risk and reward
- Net Premium / Debit
- -$1,035.00
- Max Profit (per contract)
- $65.00
- Max Loss (per contract)
- -$35.00
- Breakeven(s)
- $10.35
- Risk / Reward Ratio
- 1.857
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.
ERY collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ERY. 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% | -$35.00 |
| $2.40 | -77.8% | -$35.00 |
| $4.78 | -55.7% | -$35.00 |
| $7.17 | -33.6% | -$35.00 |
| $9.56 | -11.5% | -$35.00 |
| $11.94 | +10.6% | +$65.00 |
| $14.33 | +32.7% | +$65.00 |
| $16.72 | +54.8% | +$65.00 |
| $19.10 | +76.9% | +$65.00 |
| $21.49 | +99.0% | +$65.00 |
When traders use collar on ERY
Collars on ERY hedge an existing long ERY 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.
ERY thesis for this collar
The market-implied 1-standard-deviation range for ERY extends from approximately $8.95 on the downside to $12.65 on the upside. A ERY collar hedges an existing long ERY 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 ERY IV rank near 8.08% 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 ERY at 59.80%. As a Financial Services name, ERY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ERY-specific events.
ERY 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. ERY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ERY alongside the broader basket even when ERY-specific fundamentals are unchanged. Always rebuild the position from current ERY chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ERY?
- A collar on ERY is the collar strategy applied to ERY (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 ERY etf trading near $10.80, the strikes shown on this page are snapped to the nearest listed ERY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ERY 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 ERY collar priced from the end-of-day chain at a 30-day expiry (ATM IV 59.80%), the computed maximum profit is $65.00 per contract and the computed maximum loss is -$35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ERY collar?
- The breakeven for the ERY collar priced on this page is roughly $10.35 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 ERY market-implied 1-standard-deviation expected move is approximately 17.14%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ERY?
- Collars on ERY hedge an existing long ERY 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 ERY implied volatility affect this collar?
- ERY ATM IV is at 59.80% with IV rank near 8.08%, 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.