FMAT Collar Strategy
FMAT (Fidelity MSCI Materials Index ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund invests at least 80% of assets in securities included in the fund's underlying index. The fund's underlying index is the MSCI USA IMI Materials 25/50 Index, which represents the performance of the materials sector in the U.S. equity market. It may or may not hold all of the securities in the MSCI USA IMI Materials 25/50 Index. The fund is non-diversified.
FMAT (Fidelity MSCI Materials Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $615.7M, a beta of 0.96 versus the broader market, a 52-week range of 48.76-62.84, average daily share volume of 62K, a public-listing history dating back to 2013. These structural characteristics shape how FMAT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.96 places FMAT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FMAT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FMAT?
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 FMAT snapshot
As of June 29, 2026, spot at $58.15, ATM IV 26.00%, IV rank 34.45%, expected move 7.45%. The collar on FMAT 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 FMAT specifically: IV regime affects collar pricing on both sides; mid-range FMAT IV at 26.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.45% (roughly $4.33 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 FMAT expiries trade a higher absolute premium for lower per-day decay. Position sizing on FMAT should anchor to the underlying notional of $58.15 per share and to the trader's directional view on FMAT etf.
FMAT collar setup
The FMAT 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 FMAT near $58.15, the first option leg uses a $61.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FMAT 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 FMAT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $58.15 | long |
| Sell 1 | Call | $61.00 | $0.29 |
| Buy 1 | Put | $55.00 | $0.24 |
FMAT collar risk and reward
- Net Premium / Debit
- -$5,810.00
- Max Profit (per contract)
- $290.00
- Max Loss (per contract)
- -$310.00
- Breakeven(s)
- $58.10
- Risk / Reward Ratio
- 0.935
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.
FMAT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FMAT. 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% | -$310.00 |
| $12.87 | -77.9% | -$310.00 |
| $25.72 | -55.8% | -$310.00 |
| $38.58 | -33.7% | -$310.00 |
| $51.43 | -11.5% | -$310.00 |
| $64.29 | +10.6% | +$290.00 |
| $77.15 | +32.7% | +$290.00 |
| $90.00 | +54.8% | +$290.00 |
| $102.86 | +76.9% | +$290.00 |
| $115.72 | +99.0% | +$290.00 |
When traders use collar on FMAT
Collars on FMAT hedge an existing long FMAT 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.
FMAT thesis for this collar
The market-implied 1-standard-deviation range for FMAT extends from approximately $53.82 on the downside to $62.48 on the upside. A FMAT collar hedges an existing long FMAT 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 FMAT IV rank near 34.45% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on FMAT should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FMAT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FMAT-specific events.
FMAT 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. FMAT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FMAT alongside the broader basket even when FMAT-specific fundamentals are unchanged. Always rebuild the position from current FMAT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FMAT?
- A collar on FMAT is the collar strategy applied to FMAT (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 FMAT etf trading near $58.15, the strikes shown on this page are snapped to the nearest listed FMAT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FMAT 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 FMAT collar priced from the end-of-day chain at a 30-day expiry (ATM IV 26.00%), the computed maximum profit is $290.00 per contract and the computed maximum loss is -$310.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FMAT collar?
- The breakeven for the FMAT collar priced on this page is roughly $58.10 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 FMAT market-implied 1-standard-deviation expected move is approximately 7.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FMAT?
- Collars on FMAT hedge an existing long FMAT 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 FMAT implied volatility affect this collar?
- FMAT ATM IV is at 26.00% with IV rank near 34.45%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.