HIPS Long Call Strategy
HIPS (GraniteShares HIPS US High Income ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
HIPS offers a twist on the popular multi-asset income space: a focus on pass-through securities (those that pass on most of their income to their owners). The owners pay taxes on that income, while the entities themselves dont, thereby eliminating the double taxation associated with stock dividends. The portfolio allocates equally to four alternative income segments: closed-end funds (CEFs), business development companies (BDCs), real estate investment trusts (REITs), and energy master limited partnerships (MLPs). The top 10 securities with the highest dividend yield and lowest volatility in each segment are selected and weighted equally. It should be noted that while income from REITs, MLPs and BDCs can be high, these are typically taxed at ordinary-income rates instead of the beneficial qualified dividends rate. As such, investors in taxable accounts should consider their after-tax yield.
HIPS (GraniteShares HIPS US High Income ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $102.7M, a beta of 0.61 versus the broader market, a 52-week range of 11.28-12.46, average daily share volume of 57K, 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 0.61 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 long call on HIPS?
A long call buys upside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes above the strike plus premium at expiration.
Current HIPS snapshot
As of June 30, 2026, spot at $11.54, ATM IV 6.00%, IV rank 1.02%, expected move 1.72%. The long call 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 17-day expiry.
Why this long call structure on HIPS specifically: HIPS IV at 6.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a HIPS long call, with a market-implied 1-standard-deviation move of approximately 1.72% (roughly $0.20 on the underlying). The 17-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 $11.54 per share and to the trader's directional view on HIPS etf.
HIPS long call setup
The HIPS long call 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 $11.54, 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 17-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 1 | Call | $12.00 | $0.08 |
HIPS long call risk and reward
- Net Premium / Debit
- -$8.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$8.00
- Breakeven(s)
- $12.08
- Risk / Reward Ratio
- Unbounded
Max profit is unbounded; max loss equals the premium paid times 100. Breakeven is strike plus premium.
HIPS long call payoff curve
Modeled P&L at expiration across a range of underlying prices for the long call 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% | -$8.00 |
| $2.56 | -77.8% | -$8.00 |
| $5.11 | -55.7% | -$8.00 |
| $7.66 | -33.6% | -$8.00 |
| $10.21 | -11.5% | -$8.00 |
| $12.76 | +10.6% | +$68.23 |
| $15.31 | +32.7% | +$323.27 |
| $17.86 | +54.8% | +$578.32 |
| $20.41 | +76.9% | +$833.36 |
| $22.96 | +99.0% | +$1,088.41 |
When traders use long call on HIPS
Long calls on HIPS express a bullish thesis with defined risk; traders use them ahead of HIPS catalysts (earnings, product launches, macro events) when the expected upside justifies the premium and theta decay.
HIPS thesis for this long call
The market-implied 1-standard-deviation range for HIPS extends from approximately $11.34 on the downside to $11.74 on the upside. A HIPS long call expresses a directional view that the underlying closes above the strike plus premium at expiration, ideally with implied volatility holding or expanding to preserve extrinsic value through the hold period. Current HIPS IV rank near 1.02% 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 HIPS at 6.00%. 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 long call positions are structurally bullish; 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. Long-premium structures like a long call on HIPS 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 HIPS chain quotes before placing a trade.
Frequently asked questions
- What is a long call on HIPS?
- A long call on HIPS is the long call strategy applied to HIPS (etf). The strategy is structurally bullish: A long call buys upside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes above the strike plus premium at expiration. With HIPS etf trading near $11.54, 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 long call max profit and max loss calculated?
- Max profit is unbounded; max loss equals the premium paid times 100. Breakeven is strike plus premium. For the HIPS long call priced from the end-of-day chain at a 30-day expiry (ATM IV 6.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$8.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HIPS long call?
- The breakeven for the HIPS long call priced on this page is roughly $12.08 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 1.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a long call on HIPS?
- Long calls on HIPS express a bullish thesis with defined risk; traders use them ahead of HIPS catalysts (earnings, product launches, macro events) when the expected upside justifies the premium and theta decay.
- How does current HIPS implied volatility affect this long call?
- HIPS ATM IV is at 6.00% with IV rank near 1.02%, 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.