How are FEPI 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 FEPI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 21.80%), the computed maximum profit is $221.00 per contract and the computed maximum loss is -$279.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a FEPI collar?

The breakeven for the FEPI collar priced on this page is roughly $44.79 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 FEPI market-implied 1-standard-deviation expected move is approximately 6.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current FEPI implied volatility affect this collar?

FEPI ATM IV is at 21.80% with IV rank near 3.98%, 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.

FEPI Collar Strategy

FEPI (REX FANG & Innovation Equity Premium Income ETF), in the Financial Services sector, (Asset Management - Income industry), listed on NASDAQ.

FEPI employs a covered call strategy, aiming for a balance between generating income and participating in potential gains within the technology sector. Specifically, the fund holds the stocks of its benchmark, the Solactive FANG Innovation Index, and writes slightly out-of-the-money call options on them. This approach capitalizes on the volatility of big-tech firms that is reflected in the option premiums, while limiting some of the potential stock gains. It also provides a small buffer against declines in stock prices. Note that the buffer is limited to the options premiums and may not fully offset underlying security losses. The benchmark is an equal-weighted index comprised of 15 US technology companies, eight of which are core holdings: Apple, Alphabet, Amazon, Meta, Microsoft, Netflix, Nvidia, and Tesla.

FEPI (REX FANG & Innovation Equity Premium Income ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $677.2M, a beta of 1.00 versus the broader market, a 52-week range of 37.9-49.68, average daily share volume of 175K, a public-listing history dating back to 2023. These structural characteristics shape how FEPI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.00 places FEPI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FEPI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on FEPI?

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 FEPI snapshot

As of May 15, 2026, spot at $44.69, ATM IV 21.80%, IV rank 3.98%, expected move 6.25%. The collar on FEPI 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 FEPI specifically: IV regime affects collar pricing on both sides; compressed FEPI IV at 21.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.25% (roughly $2.79 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 FEPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEPI should anchor to the underlying notional of $44.69 per share and to the trader's directional view on FEPI etf.

FEPI collar setup

The FEPI 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 FEPI near $44.69, the first option leg uses a $47.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEPI 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 FEPI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$44.69	long
Sell 1	Call	$47.00	$0.25
Buy 1	Put	$42.00	$0.35

FEPI collar risk and reward

Net Premium / Debit: -$4,479.00
Max Profit (per contract): $221.00
Max Loss (per contract): -$279.00
Breakeven(s): $44.79
Risk / Reward Ratio: 0.792

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.

FEPI collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on FEPI. 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%	-$279.00
$9.89	-77.9%	-$279.00
$19.77	-55.8%	-$279.00
$29.65	-33.7%	-$279.00
$39.53	-11.5%	-$279.00
$49.41	+10.6%	+$221.00
$59.29	+32.7%	+$221.00
$69.17	+54.8%	+$221.00
$79.05	+76.9%	+$221.00
$88.93	+99.0%	+$221.00

When traders use collar on FEPI

Collars on FEPI hedge an existing long FEPI 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.

FEPI thesis for this collar

The market-implied 1-standard-deviation range for FEPI extends from approximately $41.90 on the downside to $47.48 on the upside. A FEPI collar hedges an existing long FEPI 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 FEPI IV rank near 3.98% 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 FEPI at 21.80%. As a Financial Services name, FEPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEPI-specific events.

FEPI 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. FEPI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FEPI alongside the broader basket even when FEPI-specific fundamentals are unchanged. Always rebuild the position from current FEPI chain quotes before placing a trade.

Frequently asked questions

What is a collar on FEPI?: A collar on FEPI is the collar strategy applied to FEPI (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 FEPI etf trading near $44.69, the strikes shown on this page are snapped to the nearest listed FEPI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are FEPI 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 FEPI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 21.80%), the computed maximum profit is $221.00 per contract and the computed maximum loss is -$279.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a FEPI collar?: The breakeven for the FEPI collar priced on this page is roughly $44.79 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 FEPI market-implied 1-standard-deviation expected move is approximately 6.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on FEPI?: Collars on FEPI hedge an existing long FEPI 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 FEPI implied volatility affect this collar?: FEPI ATM IV is at 21.80% with IV rank near 3.98%, 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.