FXI Collar Strategy
FXI (iShares China Large-Cap ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The iShares China Large-Cap ETF seeks to track the investment results of an index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange.
FXI (iShares China Large-Cap ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $6.29B, a beta of 0.55 versus the broader market, a 52-week range of 34.77-42, average daily share volume of 30.5M, a public-listing history dating back to 2004. These structural characteristics shape how FXI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.55 indicates FXI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FXI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on FXI?
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 FXI snapshot
As of May 15, 2026, spot at $36.25, ATM IV 23.10%, IV rank 38.84%, expected move 6.62%. The collar on FXI 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 28-day expiry.
Why this collar structure on FXI specifically: IV regime affects collar pricing on both sides; mid-range FXI IV at 23.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.62% (roughly $2.40 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FXI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FXI should anchor to the underlying notional of $36.25 per share and to the trader's directional view on FXI etf.
FXI collar setup
The FXI 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 FXI near $36.25, the first option leg uses a $38.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FXI chain at a 28-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 FXI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $36.25 | long |
| Sell 1 | Call | $38.00 | $0.37 |
| Buy 1 | Put | $34.50 | $0.26 |
FXI collar risk and reward
- Net Premium / Debit
- -$3,614.00
- Max Profit (per contract)
- $186.00
- Max Loss (per contract)
- -$164.00
- Breakeven(s)
- $36.14
- Risk / Reward Ratio
- 1.134
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.
FXI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on FXI. 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% | -$164.00 |
| $8.02 | -77.9% | -$164.00 |
| $16.04 | -55.8% | -$164.00 |
| $24.05 | -33.6% | -$164.00 |
| $32.07 | -11.5% | -$164.00 |
| $40.08 | +10.6% | +$186.00 |
| $48.09 | +32.7% | +$186.00 |
| $56.11 | +54.8% | +$186.00 |
| $64.12 | +76.9% | +$186.00 |
| $72.14 | +99.0% | +$186.00 |
When traders use collar on FXI
Collars on FXI hedge an existing long FXI 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.
FXI thesis for this collar
The market-implied 1-standard-deviation range for FXI extends from approximately $33.85 on the downside to $38.65 on the upside. A FXI collar hedges an existing long FXI 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 FXI IV rank near 38.84% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on FXI should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FXI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FXI-specific events.
FXI 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. FXI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FXI alongside the broader basket even when FXI-specific fundamentals are unchanged. Always rebuild the position from current FXI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on FXI?
- A collar on FXI is the collar strategy applied to FXI (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 FXI etf trading near $36.25, the strikes shown on this page are snapped to the nearest listed FXI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FXI 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 FXI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 23.10%), the computed maximum profit is $186.00 per contract and the computed maximum loss is -$164.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FXI collar?
- The breakeven for the FXI collar priced on this page is roughly $36.14 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 FXI market-implied 1-standard-deviation expected move is approximately 6.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on FXI?
- Collars on FXI hedge an existing long FXI 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 FXI implied volatility affect this collar?
- FXI ATM IV is at 23.10% with IV rank near 38.84%, 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.