MDST Collar Strategy
MDST (Westwood Salient Enhanced Midstream Income ETF), in the Financial Services sector, (Asset Management - Income industry), listed on NYSE.
This actively managed exchange-traded fund (ETF) aims to fulfill its investment objectives by primarily allocating a minimum of 80% of its total assets (including any borrowed capital used for investment purposes) to securities issued by North American midstream energy corporations and U.S. master limited partnerships (MLPs). It's important to note that this fund is structured as a non-diversified investment vehicle.
MDST (Westwood Salient Enhanced Midstream Income ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $256.6M, a beta of 0.22 versus the broader market, a 52-week range of 24.93-30.43, average daily share volume of 64K, a public-listing history dating back to 2024. These structural characteristics shape how MDST etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.22 indicates MDST has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MDST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on MDST?
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 MDST snapshot
As of June 30, 2026, spot at $28.79, ATM IV 45.60%, expected move 13.07%. The collar on MDST 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 collar structure on MDST specifically: IV rank is unavailable in the current snapshot, so regime-based timing for MDST is inferred from ATM IV at 45.60% alone, with a market-implied 1-standard-deviation move of approximately 13.07% (roughly $3.76 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 MDST expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDST should anchor to the underlying notional of $28.79 per share and to the trader's directional view on MDST etf.
MDST collar setup
The MDST 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 MDST near $28.79, 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 MDST 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 MDST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $28.79 | long |
| Sell 1 | Call | $30.00 | $0.66 |
| Buy 1 | Put | $27.00 | $0.41 |
MDST collar risk and reward
- Net Premium / Debit
- -$2,854.00
- Max Profit (per contract)
- $146.00
- Max Loss (per contract)
- -$154.00
- Breakeven(s)
- $28.54
- Risk / Reward Ratio
- 0.948
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.
MDST collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MDST. 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% | -$154.00 |
| $6.37 | -77.9% | -$154.00 |
| $12.74 | -55.8% | -$154.00 |
| $19.10 | -33.6% | -$154.00 |
| $25.47 | -11.5% | -$154.00 |
| $31.83 | +10.6% | +$146.00 |
| $38.20 | +32.7% | +$146.00 |
| $44.56 | +54.8% | +$146.00 |
| $50.93 | +76.9% | +$146.00 |
| $57.29 | +99.0% | +$146.00 |
When traders use collar on MDST
Collars on MDST hedge an existing long MDST 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.
MDST thesis for this collar
The market-implied 1-standard-deviation range for MDST extends from approximately $25.03 on the downside to $32.55 on the upside. A MDST collar hedges an existing long MDST 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. As a Financial Services name, MDST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDST-specific events.
MDST 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. MDST positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MDST alongside the broader basket even when MDST-specific fundamentals are unchanged. Always rebuild the position from current MDST chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MDST?
- A collar on MDST is the collar strategy applied to MDST (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 MDST etf trading near $28.79, the strikes shown on this page are snapped to the nearest listed MDST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MDST 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 MDST collar priced from the end-of-day chain at a 30-day expiry (ATM IV 45.60%), the computed maximum profit is $146.00 per contract and the computed maximum loss is -$154.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MDST collar?
- The breakeven for the MDST collar priced on this page is roughly $28.54 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 MDST market-implied 1-standard-deviation expected move is approximately 13.07%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MDST?
- Collars on MDST hedge an existing long MDST 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 MDST implied volatility affect this collar?
- Current MDST ATM IV is 45.60%; IV rank context is unavailable in the current snapshot.