GEM Collar Strategy
GEM (Goldman Sachs ActiveBeta Emerging Markets Equity ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.
This ETF strives to replicate the investment returns generated by the Goldman Sachs ActiveBeta Emerging Markets Equity Index.
GEM (Goldman Sachs ActiveBeta Emerging Markets Equity ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $1.73B, a beta of 1.10 versus the broader market, a 52-week range of 38.1-54.29, average daily share volume of 124K, a public-listing history dating back to 2015. These structural characteristics shape how GEM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places GEM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GEM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on GEM?
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.
GEM snapshot
As of August 14, 2026, spot at $50.69, ATM IV 26.30%, IV rank 12.86%, expected move 7.54%. The collar on GEM below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 63-day expiry.
Why this collar structure on GEM specifically: IV regime affects collar pricing on both sides; compressed GEM IV at 26.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.54% (roughly $3.82 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on GEM should anchor to the underlying notional of $50.69 per share and to the trader's directional view on GEM etf.
GEM collar setup
The GEM collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With GEM at $50.69 on that close, the first option leg uses a $53.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GEM chain at a 63-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 GEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $50.69 | long |
| Sell 1 | Call | $53.00 | $1.33 |
| Buy 1 | Put | $48.00 | $0.86 |
GEM collar risk and reward
- Net Premium / Debit
- -$5,022.00
- Max Profit (per contract)
- $278.00
- Max Loss (per contract)
- -$222.00
- Breakeven(s)
- $50.22
- Risk / Reward Ratio
- 1.252
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.
GEM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on GEM. 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% | -$222.00 |
| $11.22 | -77.9% | -$222.00 |
| $22.42 | -55.8% | -$222.00 |
| $33.63 | -33.7% | -$222.00 |
| $44.84 | -11.5% | -$222.00 |
| $56.04 | +10.6% | +$278.00 |
| $67.25 | +32.7% | +$278.00 |
| $78.46 | +54.8% | +$278.00 |
| $89.66 | +76.9% | +$278.00 |
| $100.87 | +99.0% | +$278.00 |
When traders use collar on GEM
Collars on GEM hedge an existing long GEM 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.
GEM thesis for this collar
The market-implied 1-standard-deviation range for GEM extends from approximately $46.87 on the downside to $54.51 on the upside. A GEM collar hedges an existing long GEM 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 GEM IV rank near 12.86% 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 GEM at 26.30%. As a Financial Services name, GEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GEM-specific events.
GEM 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. GEM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GEM alongside the broader basket even when GEM-specific fundamentals are unchanged. Always rebuild the position from current GEM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on GEM?
- A collar on GEM is the collar strategy applied to GEM (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 GEM etf at $50.69 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed GEM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GEM 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 GEM collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 26.30%), the computed maximum profit is $278.00 per contract and the computed maximum loss is -$222.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GEM collar?
- The breakeven for the GEM collar priced on this page is roughly $50.22 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The GEM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on GEM?
- Collars on GEM hedge an existing long GEM 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 GEM implied volatility affect this collar?
- GEM ATM IV is at 26.30% with IV rank near 12.86%, 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.