LABD Collar Strategy
LABD (Direxion Daily S&P Biotech Bear 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily S&P Biotech Bull and Bear 3X ETFs seek daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the S&P Biotechnology Select Industry Index. There is no guarantee the funds will achieve their stated investment objectives.
LABD (Direxion Daily S&P Biotech Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $30.2M, a beta of -3.15 versus the broader market, a 52-week range of 12.465-99.5, average daily share volume of 5.0M, a public-listing history dating back to 2015. These structural characteristics shape how LABD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -3.15 indicates LABD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. LABD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on LABD?
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 LABD snapshot
As of May 13, 2026, spot at $13.13, ATM IV 96.40%, IV rank 45.87%, expected move 27.64%. The collar on LABD 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 LABD specifically: IV regime affects collar pricing on both sides; mid-range LABD IV at 96.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 27.64% (roughly $3.63 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 LABD expiries trade a higher absolute premium for lower per-day decay. Position sizing on LABD should anchor to the underlying notional of $13.13 per share and to the trader's directional view on LABD etf.
LABD collar setup
The LABD 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 LABD near $13.13, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LABD 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 LABD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $13.13 | long |
| Sell 1 | Call | $14.00 | $1.80 |
| Buy 1 | Put | $12.50 | $0.60 |
LABD collar risk and reward
- Net Premium / Debit
- -$1,193.00
- Max Profit (per contract)
- $207.00
- Max Loss (per contract)
- $57.00
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- 3.632
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.
LABD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on LABD. 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% | +$57.00 |
| $2.91 | -77.8% | +$57.00 |
| $5.81 | -55.7% | +$57.00 |
| $8.72 | -33.6% | +$57.00 |
| $11.62 | -11.5% | +$57.00 |
| $14.52 | +10.6% | +$207.00 |
| $17.42 | +32.7% | +$207.00 |
| $20.32 | +54.8% | +$207.00 |
| $23.23 | +76.9% | +$207.00 |
| $26.13 | +99.0% | +$207.00 |
When traders use collar on LABD
Collars on LABD hedge an existing long LABD 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.
LABD thesis for this collar
The market-implied 1-standard-deviation range for LABD extends from approximately $9.50 on the downside to $16.76 on the upside. A LABD collar hedges an existing long LABD 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 LABD IV rank near 45.87% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on LABD should anchor more to the directional view and the expected-move geometry. As a Financial Services name, LABD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LABD-specific events.
LABD 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. LABD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LABD alongside the broader basket even when LABD-specific fundamentals are unchanged. Always rebuild the position from current LABD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on LABD?
- A collar on LABD is the collar strategy applied to LABD (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 LABD etf trading near $13.13, the strikes shown on this page are snapped to the nearest listed LABD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LABD 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 LABD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 96.40%), the computed maximum profit is $207.00 per contract and the computed maximum loss is $57.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LABD collar?
- The breakeven for the LABD collar priced on this page is no defined breakeven on the modeled curve 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 LABD market-implied 1-standard-deviation expected move is approximately 27.64%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on LABD?
- Collars on LABD hedge an existing long LABD 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 LABD implied volatility affect this collar?
- LABD ATM IV is at 96.40% with IV rank near 45.87%, 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.