FAS Collar Strategy
FAS (Direxion Daily Financial Bull 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily Financial Bull and Bear 3X ETF seek daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the Financial Select Sector Index. There is no guarantee the funds will achieve their stated investment objective.
FAS (Direxion Daily Financial Bull 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $2.05B, a beta of 2.69 versus the broader market, a 52-week range of 106.91-184.75, average daily share volume of 908K, a public-listing history dating back to 2008. These structural characteristics shape how FAS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.69 indicates FAS has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. FAS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FAS?
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 FAS snapshot
As of May 15, 2026, spot at $129.43, ATM IV 51.06%, IV rank 29.53%, expected move 14.64%. The collar on FAS 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 28-day expiry.
Why this collar structure on FAS specifically: IV regime affects collar pricing on both sides; compressed FAS IV at 51.06% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.64% (roughly $18.95 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FAS expiries trade a higher absolute premium for lower per-day decay. Position sizing on FAS should anchor to the underlying notional of $129.43 per share and to the trader's directional view on FAS etf.
FAS collar setup
The FAS 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 FAS near $129.43, the first option leg uses a $136.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FAS chain at a 28-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 FAS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $129.43 | long |
| Sell 1 | Call | $136.00 | $4.65 |
| Buy 1 | Put | $123.00 | $4.45 |
FAS collar risk and reward
- Net Premium / Debit
- -$12,923.00
- Max Profit (per contract)
- $677.00
- Max Loss (per contract)
- -$623.00
- Breakeven(s)
- $129.23
- Risk / Reward Ratio
- 1.087
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.
FAS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FAS. 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% | -$623.00 |
| $28.63 | -77.9% | -$623.00 |
| $57.24 | -55.8% | -$623.00 |
| $85.86 | -33.7% | -$623.00 |
| $114.48 | -11.6% | -$623.00 |
| $143.09 | +10.6% | +$677.00 |
| $171.71 | +32.7% | +$677.00 |
| $200.33 | +54.8% | +$677.00 |
| $228.94 | +76.9% | +$677.00 |
| $257.56 | +99.0% | +$677.00 |
When traders use collar on FAS
Collars on FAS hedge an existing long FAS 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.
FAS thesis for this collar
The market-implied 1-standard-deviation range for FAS extends from approximately $110.48 on the downside to $148.38 on the upside. A FAS collar hedges an existing long FAS 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 FAS IV rank near 29.53% 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 FAS at 51.06%. As a Financial Services name, FAS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FAS-specific events.
FAS 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. FAS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FAS alongside the broader basket even when FAS-specific fundamentals are unchanged. Always rebuild the position from current FAS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FAS?
- A collar on FAS is the collar strategy applied to FAS (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 FAS etf trading near $129.43, the strikes shown on this page are snapped to the nearest listed FAS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FAS 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 FAS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 51.06%), the computed maximum profit is $677.00 per contract and the computed maximum loss is -$623.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FAS collar?
- The breakeven for the FAS collar priced on this page is roughly $129.23 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 FAS market-implied 1-standard-deviation expected move is approximately 14.64%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FAS?
- Collars on FAS hedge an existing long FAS 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 FAS implied volatility affect this collar?
- FAS ATM IV is at 51.06% with IV rank near 29.53%, 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.