MSTU Collar Strategy
MSTU (T-REX 2X Long MSTR Daily Target ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The fund, under normal circumstances, invests in swap agreements that provide 200% daily exposure to MSTR equal to at least 80% of its net assets (plus any borrowings for investment purposes). MicroStrategy Inc. engages in the provision of enterprise analytics and mobility software. The fund is non-diversified.
MSTU (T-REX 2X Long MSTR Daily Target ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $163.3M, a beta of 4.39 versus the broader market, a 52-week range of 3.4-107.6, average daily share volume of 36.4M, a public-listing history dating back to 2024. These structural characteristics shape how MSTU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 4.39 indicates MSTU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on MSTU?
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 MSTU snapshot
As of May 15, 2026, spot at $7.86, ATM IV 130.13%, IV rank 25.37%, expected move 37.31%. The collar on MSTU 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 MSTU specifically: IV regime affects collar pricing on both sides; compressed MSTU IV at 130.13% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 37.31% (roughly $2.93 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 MSTU expiries trade a higher absolute premium for lower per-day decay. Position sizing on MSTU should anchor to the underlying notional of $7.86 per share and to the trader's directional view on MSTU etf.
MSTU collar setup
The MSTU 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 MSTU near $7.86, the first option leg uses a $8.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MSTU 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 MSTU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.86 | long |
| Sell 1 | Call | $8.50 | $0.81 |
| Buy 1 | Put | $7.50 | $1.01 |
MSTU collar risk and reward
- Net Premium / Debit
- -$806.50
- Max Profit (per contract)
- $43.50
- Max Loss (per contract)
- -$56.50
- Breakeven(s)
- $8.07
- Risk / Reward Ratio
- 0.770
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.
MSTU collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on MSTU. 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% | -$56.50 |
| $1.75 | -77.8% | -$56.50 |
| $3.48 | -55.7% | -$56.50 |
| $5.22 | -33.6% | -$56.50 |
| $6.96 | -11.5% | -$56.50 |
| $8.69 | +10.6% | +$43.50 |
| $10.43 | +32.7% | +$43.50 |
| $12.17 | +54.8% | +$43.50 |
| $13.90 | +76.9% | +$43.50 |
| $15.64 | +99.0% | +$43.50 |
When traders use collar on MSTU
Collars on MSTU hedge an existing long MSTU 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.
MSTU thesis for this collar
The market-implied 1-standard-deviation range for MSTU extends from approximately $4.93 on the downside to $10.79 on the upside. A MSTU collar hedges an existing long MSTU 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 MSTU IV rank near 25.37% 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 MSTU at 130.13%. As a Financial Services name, MSTU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MSTU-specific events.
MSTU 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. MSTU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MSTU alongside the broader basket even when MSTU-specific fundamentals are unchanged. Always rebuild the position from current MSTU chain quotes before placing a trade.
Frequently asked questions
- What is a collar on MSTU?
- A collar on MSTU is the collar strategy applied to MSTU (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 MSTU etf trading near $7.86, the strikes shown on this page are snapped to the nearest listed MSTU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MSTU 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 MSTU collar priced from the end-of-day chain at a 30-day expiry (ATM IV 130.13%), the computed maximum profit is $43.50 per contract and the computed maximum loss is -$56.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MSTU collar?
- The breakeven for the MSTU collar priced on this page is roughly $8.07 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 MSTU market-implied 1-standard-deviation expected move is approximately 37.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on MSTU?
- Collars on MSTU hedge an existing long MSTU 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 MSTU implied volatility affect this collar?
- MSTU ATM IV is at 130.13% with IV rank near 25.37%, 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.