HIPS Collar Strategy
HIPS (GraniteShares HIPS US High Income ETF), in the Financial Services sector, (Asset Management - Income industry), listed on AMEX.
The GraniteShares HIPS US High Income ETF seeks to track the performance, before fees and expenses, of the EQM High Income Pass-Through Securities Index*.
HIPS (GraniteShares HIPS US High Income ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $105.0M, a beta of 0.66 versus the broader market, a 52-week range of 11.39-12.46, average daily share volume of 45K, a public-listing history dating back to 2015. These structural characteristics shape how HIPS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.66 indicates HIPS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. HIPS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on HIPS?
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 HIPS snapshot
As of May 15, 2026, spot at $11.75, ATM IV 318.80%, IV rank 65.02%, expected move 14.98%. The collar on HIPS 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 HIPS specifically: IV regime affects collar pricing on both sides; mid-range HIPS IV at 318.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 14.98% (roughly $1.76 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 HIPS expiries trade a higher absolute premium for lower per-day decay. Position sizing on HIPS should anchor to the underlying notional of $11.75 per share and to the trader's directional view on HIPS etf.
HIPS collar setup
The HIPS 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 HIPS near $11.75, the first option leg uses a $12.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HIPS 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 HIPS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $11.75 | long |
| Sell 1 | Call | $12.00 | $0.40 |
| Buy 1 | Put | $11.00 | $0.25 |
HIPS collar risk and reward
- Net Premium / Debit
- -$1,160.00
- Max Profit (per contract)
- $40.00
- Max Loss (per contract)
- -$60.00
- Breakeven(s)
- $11.60
- Risk / Reward Ratio
- 0.667
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.
HIPS collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on HIPS. 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 | -99.9% | -$60.00 |
| $2.61 | -77.8% | -$60.00 |
| $5.20 | -55.7% | -$60.00 |
| $7.80 | -33.6% | -$60.00 |
| $10.40 | -11.5% | -$60.00 |
| $12.99 | +10.6% | +$40.00 |
| $15.59 | +32.7% | +$40.00 |
| $18.19 | +54.8% | +$40.00 |
| $20.79 | +76.9% | +$40.00 |
| $23.38 | +99.0% | +$40.00 |
When traders use collar on HIPS
Collars on HIPS hedge an existing long HIPS 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.
HIPS thesis for this collar
The market-implied 1-standard-deviation range for HIPS extends from approximately $9.99 on the downside to $13.51 on the upside. A HIPS collar hedges an existing long HIPS 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 HIPS IV rank near 65.02% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on HIPS should anchor more to the directional view and the expected-move geometry. As a Financial Services name, HIPS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HIPS-specific events.
HIPS 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. HIPS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HIPS alongside the broader basket even when HIPS-specific fundamentals are unchanged. Always rebuild the position from current HIPS chain quotes before placing a trade.
Frequently asked questions
- What is a collar on HIPS?
- A collar on HIPS is the collar strategy applied to HIPS (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 HIPS etf trading near $11.75, the strikes shown on this page are snapped to the nearest listed HIPS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HIPS 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 HIPS collar priced from the end-of-day chain at a 30-day expiry (ATM IV 318.80%), the computed maximum profit is $40.00 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HIPS collar?
- The breakeven for the HIPS collar priced on this page is roughly $11.60 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 HIPS market-implied 1-standard-deviation expected move is approximately 14.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on HIPS?
- Collars on HIPS hedge an existing long HIPS 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 HIPS implied volatility affect this collar?
- HIPS ATM IV is at 318.80% with IV rank near 65.02%, 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.