HDG Bear Put Spread Strategy
HDG (ProShares - Hedge Replication ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund invests in financial instruments that ProShare Advisors believes, in combination, should track the performance of the benchmark. The benchmark seeks to provide the risk and return characteristics of the hedge fund asset class by targeting a high correlation to the HFRI Fund Weighted Composite Index (the "HFRI"). The HFRI is designed to reflect hedge fund industry performance through an equally weighted composite of over 2000 constituent funds. The fund is non-diversified.
HDG (ProShares - Hedge Replication ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $25.7M, a beta of 0.33 versus the broader market, a 52-week range of 48.82-54.43, average daily share volume of 2K, a public-listing history dating back to 2011. These structural characteristics shape how HDG etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.33 indicates HDG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. HDG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on HDG?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current HDG snapshot
As of May 15, 2026, spot at $53.67, ATM IV 18.00%, IV rank 16.68%, expected move 5.16%. The bear put spread on HDG 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 63-day expiry.
Why this bear put spread structure on HDG specifically: HDG IV at 18.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a HDG bear put spread, with a market-implied 1-standard-deviation move of approximately 5.16% (roughly $2.77 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 HDG expiries trade a higher absolute premium for lower per-day decay. Position sizing on HDG should anchor to the underlying notional of $53.67 per share and to the trader's directional view on HDG etf.
HDG bear put spread setup
The HDG bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With HDG near $53.67, the first option leg uses a $54.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HDG 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 HDG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $54.00 | $1.62 |
| Sell 1 | Put | $51.00 | $0.47 |
HDG bear put spread risk and reward
- Net Premium / Debit
- -$115.00
- Max Profit (per contract)
- $185.00
- Max Loss (per contract)
- -$115.00
- Breakeven(s)
- $52.85
- Risk / Reward Ratio
- 1.609
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
HDG bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on HDG. 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% | +$185.00 |
| $11.88 | -77.9% | +$185.00 |
| $23.74 | -55.8% | +$185.00 |
| $35.61 | -33.7% | +$185.00 |
| $47.47 | -11.5% | +$185.00 |
| $59.34 | +10.6% | -$115.00 |
| $71.20 | +32.7% | -$115.00 |
| $83.07 | +54.8% | -$115.00 |
| $94.94 | +76.9% | -$115.00 |
| $106.80 | +99.0% | -$115.00 |
When traders use bear put spread on HDG
Bear put spreads on HDG reduce the cost of a bearish HDG etf position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
HDG thesis for this bear put spread
The market-implied 1-standard-deviation range for HDG extends from approximately $50.90 on the downside to $56.44 on the upside. A HDG bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on HDG, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current HDG IV rank near 16.68% 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 HDG at 18.00%. As a Financial Services name, HDG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HDG-specific events.
HDG bear put spread positions are structurally moderately bearish; 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. HDG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HDG alongside the broader basket even when HDG-specific fundamentals are unchanged. Long-premium structures like a bear put spread on HDG are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current HDG chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on HDG?
- A bear put spread on HDG is the bear put spread strategy applied to HDG (etf). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With HDG etf trading near $53.67, the strikes shown on this page are snapped to the nearest listed HDG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HDG bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the HDG bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 18.00%), the computed maximum profit is $185.00 per contract and the computed maximum loss is -$115.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HDG bear put spread?
- The breakeven for the HDG bear put spread priced on this page is roughly $52.85 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 HDG market-implied 1-standard-deviation expected move is approximately 5.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on HDG?
- Bear put spreads on HDG reduce the cost of a bearish HDG etf position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current HDG implied volatility affect this bear put spread?
- HDG ATM IV is at 18.00% with IV rank near 16.68%, 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.