FTHI Collar Strategy
FTHI (First Trust BuyWrite Income ETF), in the Financial Services sector, (Asset Management - Income industry), listed on NASDAQ.
The Fund's primary investment objective is to provide current income. The Fund's secondary investment objective is to provide capital appreciation. The Fund will pursue its objectives by investing in equity securities listed on U.S. exchanges of all market capitalizations and by utilizing an "option strategy" consisting of writing (selling) U.S. exchange-traded covered call options on the Standard & Poor's 500 Index (the "Index"). Under normal market conditions, the Fund invests primarily in equity securities listed on U.S. exchanges of all market capitalizations. The Fund will also employ an option strategy in which it will write U.S. exchange-traded covered call options on the Index in order to seek additional cash flow in the form of premiums on the options that may be distributed to shareholders on a monthly basis. A premium is the income received by an investor who sells or writes an option contract to another party.
FTHI (First Trust BuyWrite Income ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $2.18B, a beta of 0.57 versus the broader market, a 52-week range of 21.68-24.18, average daily share volume of 696K, a public-listing history dating back to 2014. These structural characteristics shape how FTHI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.57 indicates FTHI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FTHI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FTHI?
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 FTHI snapshot
As of May 15, 2026, spot at $23.84, ATM IV 33.50%, IV rank 29.17%, expected move 9.60%. The collar on FTHI 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 FTHI specifically: IV regime affects collar pricing on both sides; compressed FTHI IV at 33.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.60% (roughly $2.29 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 FTHI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FTHI should anchor to the underlying notional of $23.84 per share and to the trader's directional view on FTHI etf.
FTHI collar setup
The FTHI 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 FTHI near $23.84, the first option leg uses a $25.03 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FTHI 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 FTHI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $23.84 | long |
| Sell 1 | Call | $25.03 | N/A |
| Buy 1 | Put | $22.65 | N/A |
FTHI collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
FTHI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FTHI. 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.
When traders use collar on FTHI
Collars on FTHI hedge an existing long FTHI 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.
FTHI thesis for this collar
The market-implied 1-standard-deviation range for FTHI extends from approximately $21.55 on the downside to $26.13 on the upside. A FTHI collar hedges an existing long FTHI 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 FTHI IV rank near 29.17% 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 FTHI at 33.50%. As a Financial Services name, FTHI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FTHI-specific events.
FTHI 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. FTHI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FTHI alongside the broader basket even when FTHI-specific fundamentals are unchanged. Always rebuild the position from current FTHI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FTHI?
- A collar on FTHI is the collar strategy applied to FTHI (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 FTHI etf trading near $23.84, the strikes shown on this page are snapped to the nearest listed FTHI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FTHI 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 FTHI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 33.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FTHI collar?
- The breakeven for the FTHI collar priced on this page is no defined breakeven on the modeled curve 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 FTHI market-implied 1-standard-deviation expected move is approximately 9.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FTHI?
- Collars on FTHI hedge an existing long FTHI 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 FTHI implied volatility affect this collar?
- FTHI ATM IV is at 33.50% with IV rank near 29.17%, 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.