ITB Collar Strategy
ITB (iShares U.S. Home Construction ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The iShares U.S. Home Construction ETF (ITB) seeks to track the investment results of an index composed of U.S. equities in the home construction sector.
ITB (iShares U.S. Home Construction ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.43B, a beta of 1.72 versus the broader market, a 52-week range of 87.02-118, average daily share volume of 2.3M, a public-listing history dating back to 2006. These structural characteristics shape how ITB etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.72 indicates ITB has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. ITB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on ITB?
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 ITB snapshot
As of May 15, 2026, spot at $86.69, ATM IV 37.70%, IV rank 87.96%, expected move 10.81%. The collar on ITB 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 ITB specifically: IV regime affects collar pricing on both sides; elevated ITB IV at 37.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.81% (roughly $9.37 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 ITB expiries trade a higher absolute premium for lower per-day decay. Position sizing on ITB should anchor to the underlying notional of $86.69 per share and to the trader's directional view on ITB etf.
ITB collar setup
The ITB 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 ITB near $86.69, the first option leg uses a $91.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ITB 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 ITB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $86.69 | long |
| Sell 1 | Call | $91.50 | $1.98 |
| Buy 1 | Put | $84.50 | $2.78 |
ITB collar risk and reward
- Net Premium / Debit
- -$8,749.00
- Max Profit (per contract)
- $401.00
- Max Loss (per contract)
- -$299.00
- Breakeven(s)
- $87.49
- Risk / Reward Ratio
- 1.341
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.
ITB collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on ITB. 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% | -$299.00 |
| $19.18 | -77.9% | -$299.00 |
| $38.34 | -55.8% | -$299.00 |
| $57.51 | -33.7% | -$299.00 |
| $76.68 | -11.6% | -$299.00 |
| $95.84 | +10.6% | +$401.00 |
| $115.01 | +32.7% | +$401.00 |
| $134.18 | +54.8% | +$401.00 |
| $153.34 | +76.9% | +$401.00 |
| $172.51 | +99.0% | +$401.00 |
When traders use collar on ITB
Collars on ITB hedge an existing long ITB 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.
ITB thesis for this collar
The market-implied 1-standard-deviation range for ITB extends from approximately $77.32 on the downside to $96.06 on the upside. A ITB collar hedges an existing long ITB 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 ITB IV rank near 87.96% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on ITB at 37.70%. As a Financial Services name, ITB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ITB-specific events.
ITB 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. ITB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ITB alongside the broader basket even when ITB-specific fundamentals are unchanged. Always rebuild the position from current ITB chain quotes before placing a trade.
Frequently asked questions
- What is a collar on ITB?
- A collar on ITB is the collar strategy applied to ITB (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 ITB etf trading near $86.69, the strikes shown on this page are snapped to the nearest listed ITB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ITB 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 ITB collar priced from the end-of-day chain at a 30-day expiry (ATM IV 37.70%), the computed maximum profit is $401.00 per contract and the computed maximum loss is -$299.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ITB collar?
- The breakeven for the ITB collar priced on this page is roughly $87.49 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 ITB market-implied 1-standard-deviation expected move is approximately 10.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on ITB?
- Collars on ITB hedge an existing long ITB 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 ITB implied volatility affect this collar?
- ITB ATM IV is at 37.70% with IV rank near 87.96%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.