How are KRE 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 KRE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 26.05%), the computed maximum profit is $344.50 per contract and the computed maximum loss is -$355.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KRE collar?

The breakeven for the KRE collar priced on this page is roughly $67.06 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 KRE market-implied 1-standard-deviation expected move is approximately 7.47%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KRE implied volatility affect this collar?

KRE ATM IV is at 26.05% with IV rank near 15.97%, 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.

KRE Collar Strategy

KRE (State Street SPDR S&P Regional Banking ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The State Street SPDR S&P Regional Banking ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Regional Banks Select Industry Index (the "Index")Seeks to provide exposure the regional banks segment of the S&P TMIMembership in the Select Industry Indices is based on the GICS classification, as well as liquidity and market cap requirementsSeeks to track a modified equal weighted index which provides the potential for unconcentrated industry exposure across large, mid and small cap stocksAllows investors to take strategic or tactical positions at a more targeted level than traditional sector based investing

KRE (State Street SPDR S&P Regional Banking ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $4.08B, a beta of 1.31 versus the broader market, a 52-week range of 55.37-74.08, average daily share volume of 17.6M, a public-listing history dating back to 2006. These structural characteristics shape how KRE etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.31 indicates KRE has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. KRE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on KRE?

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 KRE snapshot

As of May 15, 2026, spot at $66.97, ATM IV 26.05%, IV rank 15.97%, expected move 7.47%. The collar on KRE 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 28-day expiry.

Why this collar structure on KRE specifically: IV regime affects collar pricing on both sides; compressed KRE IV at 26.05% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.47% (roughly $5.00 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KRE expiries trade a higher absolute premium for lower per-day decay. Position sizing on KRE should anchor to the underlying notional of $66.97 per share and to the trader's directional view on KRE etf.

KRE collar setup

The KRE 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 KRE near $66.97, the first option leg uses a $70.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KRE chain at a 28-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 KRE shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$66.97	long
Sell 1	Call	$70.50	$0.65
Buy 1	Put	$63.50	$0.73

KRE collar risk and reward

Net Premium / Debit: -$6,705.50
Max Profit (per contract): $344.50
Max Loss (per contract): -$355.50
Breakeven(s): $67.06
Risk / Reward Ratio: 0.969

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.

KRE collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on KRE. 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%	-$355.50
$14.82	-77.9%	-$355.50
$29.62	-55.8%	-$355.50
$44.43	-33.7%	-$355.50
$59.24	-11.5%	-$355.50
$74.04	+10.6%	+$344.50
$88.85	+32.7%	+$344.50
$103.65	+54.8%	+$344.50
$118.46	+76.9%	+$344.50
$133.27	+99.0%	+$344.50

When traders use collar on KRE

Collars on KRE hedge an existing long KRE 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.

KRE thesis for this collar

The market-implied 1-standard-deviation range for KRE extends from approximately $61.97 on the downside to $71.97 on the upside. A KRE collar hedges an existing long KRE 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 KRE IV rank near 15.97% 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 KRE at 26.05%. As a Financial Services name, KRE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KRE-specific events.

KRE 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. KRE positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KRE alongside the broader basket even when KRE-specific fundamentals are unchanged. Always rebuild the position from current KRE chain quotes before placing a trade.

Frequently asked questions

What is a collar on KRE?: A collar on KRE is the collar strategy applied to KRE (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 KRE etf trading near $66.97, the strikes shown on this page are snapped to the nearest listed KRE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KRE 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 KRE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 26.05%), the computed maximum profit is $344.50 per contract and the computed maximum loss is -$355.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KRE collar?: The breakeven for the KRE collar priced on this page is roughly $67.06 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 KRE market-implied 1-standard-deviation expected move is approximately 7.47%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on KRE?: Collars on KRE hedge an existing long KRE 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 KRE implied volatility affect this collar?: KRE ATM IV is at 26.05% with IV rank near 15.97%, 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.