KGRN Collar Strategy
KGRN (KraneShares MSCI China Clean Technology Index ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund will invest at least 80% of its net assets in instruments in its index or in instruments that have economic characteristics similar to those in the index. The underlying index is a free-float adjusted market capitalization weighted index modified per the 10/40 Constraint designed to measure the equity market performance of Chinese companies in the industrial, utility, real estate and technology sectors that contribute to a more environmentally sustainable economy. It is non-diversified.
KGRN (KraneShares MSCI China Clean Technology Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $63.5M, a beta of 0.67 versus the broader market, a 52-week range of 25.26-32.949, average daily share volume of 17K, a public-listing history dating back to 2017. These structural characteristics shape how KGRN etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.67 indicates KGRN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. KGRN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on KGRN?
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 KGRN snapshot
As of May 12, 2026, spot at $28.95, ATM IV 27.70%, IV rank 3.34%, expected move 7.94%. The collar on KGRN 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 KGRN specifically: IV regime affects collar pricing on both sides; compressed KGRN IV at 27.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.94% (roughly $2.30 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 KGRN expiries trade a higher absolute premium for lower per-day decay. Position sizing on KGRN should anchor to the underlying notional of $28.95 per share and to the trader's directional view on KGRN etf.
KGRN collar setup
The KGRN 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 KGRN near $28.95, the first option leg uses a $30.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KGRN 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 KGRN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $28.95 | long |
| Sell 1 | Call | $30.00 | $0.73 |
| Buy 1 | Put | $28.00 | $0.90 |
KGRN collar risk and reward
- Net Premium / Debit
- -$2,912.50
- Max Profit (per contract)
- $87.50
- Max Loss (per contract)
- -$112.50
- Breakeven(s)
- $29.13
- Risk / Reward Ratio
- 0.778
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.
KGRN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on KGRN. 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% | -$112.50 |
| $6.41 | -77.9% | -$112.50 |
| $12.81 | -55.8% | -$112.50 |
| $19.21 | -33.6% | -$112.50 |
| $25.61 | -11.5% | -$112.50 |
| $32.01 | +10.6% | +$87.50 |
| $38.41 | +32.7% | +$87.50 |
| $44.81 | +54.8% | +$87.50 |
| $51.21 | +76.9% | +$87.50 |
| $57.61 | +99.0% | +$87.50 |
When traders use collar on KGRN
Collars on KGRN hedge an existing long KGRN 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.
KGRN thesis for this collar
The market-implied 1-standard-deviation range for KGRN extends from approximately $26.65 on the downside to $31.25 on the upside. A KGRN collar hedges an existing long KGRN 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 KGRN IV rank near 3.34% 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 KGRN at 27.70%. As a Financial Services name, KGRN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KGRN-specific events.
KGRN 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. KGRN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KGRN alongside the broader basket even when KGRN-specific fundamentals are unchanged. Always rebuild the position from current KGRN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on KGRN?
- A collar on KGRN is the collar strategy applied to KGRN (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 KGRN etf trading near $28.95, the strikes shown on this page are snapped to the nearest listed KGRN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KGRN 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 KGRN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $87.50 per contract and the computed maximum loss is -$112.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KGRN collar?
- The breakeven for the KGRN collar priced on this page is roughly $29.13 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 KGRN market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on KGRN?
- Collars on KGRN hedge an existing long KGRN 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 KGRN implied volatility affect this collar?
- KGRN ATM IV is at 27.70% with IV rank near 3.34%, 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.