FMDE Collar Strategy
FMDE (Fidelity Enhanced Mid Cap ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
A U.S. equity strategy maintaining a mid-cap profile, leveraging a disciplined approach investing in companies with attractive characteristics.
FMDE (Fidelity Enhanced Mid Cap ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $6.50B, a beta of 1.05 versus the broader market, a 52-week range of 32.5-39.39, average daily share volume of 1.1M, a public-listing history dating back to 2023. These structural characteristics shape how FMDE etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.05 places FMDE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FMDE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FMDE?
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 FMDE snapshot
As of May 15, 2026, spot at $38.44, ATM IV 22.40%, IV rank 1.03%, expected move 6.42%. The collar on FMDE 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 FMDE specifically: IV regime affects collar pricing on both sides; compressed FMDE IV at 22.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.42% (roughly $2.47 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 FMDE expiries trade a higher absolute premium for lower per-day decay. Position sizing on FMDE should anchor to the underlying notional of $38.44 per share and to the trader's directional view on FMDE etf.
FMDE collar setup
The FMDE 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 FMDE near $38.44, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FMDE 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 FMDE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $38.44 | long |
| Sell 1 | Call | $40.00 | $0.48 |
| Buy 1 | Put | $37.00 | $1.25 |
FMDE collar risk and reward
- Net Premium / Debit
- -$3,921.00
- Max Profit (per contract)
- $79.00
- Max Loss (per contract)
- -$221.00
- Breakeven(s)
- $39.21
- Risk / Reward Ratio
- 0.357
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.
FMDE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FMDE. 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% | -$221.00 |
| $8.51 | -77.9% | -$221.00 |
| $17.01 | -55.8% | -$221.00 |
| $25.50 | -33.7% | -$221.00 |
| $34.00 | -11.5% | -$221.00 |
| $42.50 | +10.6% | +$79.00 |
| $51.00 | +32.7% | +$79.00 |
| $59.50 | +54.8% | +$79.00 |
| $68.00 | +76.9% | +$79.00 |
| $76.49 | +99.0% | +$79.00 |
When traders use collar on FMDE
Collars on FMDE hedge an existing long FMDE 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.
FMDE thesis for this collar
The market-implied 1-standard-deviation range for FMDE extends from approximately $35.97 on the downside to $40.91 on the upside. A FMDE collar hedges an existing long FMDE 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 FMDE IV rank near 1.03% 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 FMDE at 22.40%. As a Financial Services name, FMDE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FMDE-specific events.
FMDE 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. FMDE positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FMDE alongside the broader basket even when FMDE-specific fundamentals are unchanged. Always rebuild the position from current FMDE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FMDE?
- A collar on FMDE is the collar strategy applied to FMDE (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 FMDE etf trading near $38.44, the strikes shown on this page are snapped to the nearest listed FMDE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FMDE 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 FMDE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.40%), the computed maximum profit is $79.00 per contract and the computed maximum loss is -$221.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FMDE collar?
- The breakeven for the FMDE collar priced on this page is roughly $39.21 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 FMDE market-implied 1-standard-deviation expected move is approximately 6.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FMDE?
- Collars on FMDE hedge an existing long FMDE 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 FMDE implied volatility affect this collar?
- FMDE ATM IV is at 22.40% with IV rank near 1.03%, 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.