NVDD Collar Strategy
NVDD (Direxion Daily NVDA Bear 1X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on NASDAQ.
These Direxion Daily ETFs are designed to provide daily investment outcomes linked to the performance of NVIDIA Corporation's (NASDAQ: NVDA) common shares, before accounting for fees and expenses. Specifically, the Direxion Daily NVDA Bear 1X ETF (NVDD) aims for daily results reflecting 100% of the opposite movement of NVIDIA's stock, while the Direxion Daily NVDA Bull 2X ETF (NVDU) targets daily returns that are 200% of NVIDIA's stock performance.
NVDD (Direxion Daily NVDA Bear 1X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $23.9M, a beta of -1.62 versus the broader market, a 52-week range of 29.405-48.5, average daily share volume of 145K, a public-listing history dating back to 2023. These structural characteristics shape how NVDD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -1.62 indicates NVDD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NVDD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on NVDD?
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 NVDD snapshot
As of June 29, 2026, spot at $34.97, ATM IV 36.30%, IV rank 3.87%, expected move 10.41%. The collar on NVDD 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 18-day expiry.
Why this collar structure on NVDD specifically: IV regime affects collar pricing on both sides; compressed NVDD IV at 36.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.41% (roughly $3.64 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NVDD expiries trade a higher absolute premium for lower per-day decay. Position sizing on NVDD should anchor to the underlying notional of $34.97 per share and to the trader's directional view on NVDD etf.
NVDD collar setup
The NVDD 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 NVDD near $34.97, the first option leg uses a $37.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NVDD chain at a 18-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 NVDD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $34.97 | long |
| Sell 1 | Call | $37.00 | $0.63 |
| Buy 1 | Put | $33.00 | $0.35 |
NVDD collar risk and reward
- Net Premium / Debit
- -$3,469.50
- Max Profit (per contract)
- $230.50
- Max Loss (per contract)
- -$169.50
- Breakeven(s)
- $34.70
- Risk / Reward Ratio
- 1.360
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.
NVDD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on NVDD. 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% | -$169.50 |
| $7.74 | -77.9% | -$169.50 |
| $15.47 | -55.8% | -$169.50 |
| $23.20 | -33.6% | -$169.50 |
| $30.93 | -11.5% | -$169.50 |
| $38.66 | +10.6% | +$230.50 |
| $46.40 | +32.7% | +$230.50 |
| $54.13 | +54.8% | +$230.50 |
| $61.86 | +76.9% | +$230.50 |
| $69.59 | +99.0% | +$230.50 |
When traders use collar on NVDD
Collars on NVDD hedge an existing long NVDD 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.
NVDD thesis for this collar
The market-implied 1-standard-deviation range for NVDD extends from approximately $31.33 on the downside to $38.61 on the upside. A NVDD collar hedges an existing long NVDD 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 NVDD IV rank near 3.87% 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 NVDD at 36.30%. As a Financial Services name, NVDD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NVDD-specific events.
NVDD 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. NVDD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NVDD alongside the broader basket even when NVDD-specific fundamentals are unchanged. Always rebuild the position from current NVDD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on NVDD?
- A collar on NVDD is the collar strategy applied to NVDD (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 NVDD etf trading near $34.97, the strikes shown on this page are snapped to the nearest listed NVDD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NVDD 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 NVDD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 36.30%), the computed maximum profit is $230.50 per contract and the computed maximum loss is -$169.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NVDD collar?
- The breakeven for the NVDD collar priced on this page is roughly $34.70 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 NVDD market-implied 1-standard-deviation expected move is approximately 10.41%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on NVDD?
- Collars on NVDD hedge an existing long NVDD 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 NVDD implied volatility affect this collar?
- NVDD ATM IV is at 36.30% with IV rank near 3.87%, 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.