FDT Collar Strategy
FDT (First Trust Developed Markets ex-US AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The First Trust Developed Markets ex-US AlphaDEX Fund is an exchange-traded fund whose investment objective is to generally replicate the total return (price and yield) of the Nasdaq AlphaDEX Developed Markets Ex-US Index, prior to accounting for its own fees and expenses.
FDT (First Trust Developed Markets ex-US AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $911.6M, a beta of 1.08 versus the broader market, a 52-week range of 67.39-101.32, average daily share volume of 123K, a public-listing history dating back to 2011. These structural characteristics shape how FDT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.08 places FDT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FDT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FDT?
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 FDT snapshot
As of June 29, 2026, spot at $94.06, ATM IV 418.30%, IV rank 83.75%, expected move 119.92%. The collar on FDT 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 18-day expiry.
Why this collar structure on FDT specifically: IV regime affects collar pricing on both sides; elevated FDT IV at 418.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 119.92% (roughly $112.80 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FDT expiries trade a higher absolute premium for lower per-day decay. Position sizing on FDT should anchor to the underlying notional of $94.06 per share and to the trader's directional view on FDT etf.
FDT collar setup
The FDT 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 FDT near $94.06, the first option leg uses a $99.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FDT chain at a 18-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 FDT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $94.06 | long |
| Sell 1 | Call | $99.00 | $0.10 |
| Buy 1 | Put | $89.00 | $0.21 |
FDT collar risk and reward
- Net Premium / Debit
- -$9,417.00
- Max Profit (per contract)
- $483.00
- Max Loss (per contract)
- -$517.00
- Breakeven(s)
- $94.17
- Risk / Reward Ratio
- 0.934
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.
FDT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FDT. 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% | -$517.00 |
| $20.81 | -77.9% | -$517.00 |
| $41.60 | -55.8% | -$517.00 |
| $62.40 | -33.7% | -$517.00 |
| $83.19 | -11.6% | -$517.00 |
| $103.99 | +10.6% | +$483.00 |
| $124.79 | +32.7% | +$483.00 |
| $145.58 | +54.8% | +$483.00 |
| $166.38 | +76.9% | +$483.00 |
| $187.17 | +99.0% | +$483.00 |
When traders use collar on FDT
Collars on FDT hedge an existing long FDT 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.
FDT thesis for this collar
The market-implied 1-standard-deviation range for FDT extends from approximately $-18.74 on the downside to $206.86 on the upside. A FDT collar hedges an existing long FDT 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 FDT IV rank near 83.75% 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 FDT at 418.30%. As a Financial Services name, FDT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FDT-specific events.
FDT 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. FDT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FDT alongside the broader basket even when FDT-specific fundamentals are unchanged. Always rebuild the position from current FDT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FDT?
- A collar on FDT is the collar strategy applied to FDT (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 FDT etf trading near $94.06, the strikes shown on this page are snapped to the nearest listed FDT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FDT 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 FDT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 418.30%), the computed maximum profit is $483.00 per contract and the computed maximum loss is -$517.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FDT collar?
- The breakeven for the FDT collar priced on this page is roughly $94.17 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 FDT market-implied 1-standard-deviation expected move is approximately 119.92%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FDT?
- Collars on FDT hedge an existing long FDT 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 FDT implied volatility affect this collar?
- FDT ATM IV is at 418.30% with IV rank near 83.75%, 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.