How are PBE 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 PBE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.50%), the computed maximum profit is $515.00 per contract and the computed maximum loss is -$385.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PBE collar?

The breakeven for the PBE collar priced on this page is roughly $87.85 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 PBE market-implied 1-standard-deviation expected move is approximately 6.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PBE implied volatility affect this collar?

PBE ATM IV is at 22.50% with IV rank near 28.94%, 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.

PBE Collar Strategy

PBE (Invesco Biotechnology & Genome ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco Biotechnology & Genome ETF (PBE) seeks to replicate the performance of the Dynamic Biotech & Genome Intellidex Index. This fund typically allocates a minimum of 90% of its total assets to the securities comprising the underlying index. The Index is constructed to achieve capital appreciation by thoroughly evaluating companies based on several investment criteria, including their price momentum, earnings growth, overall quality, management decisions, and valuation. It consists of 30 U.S.-based companies within the biotechnology and genome sectors. These companies are primarily involved in the research, development, manufacture, and distribution of various biotechnological products, services, and processes, or they are businesses that stand to gain significantly from scientific and technological breakthroughs in biotechnology and genetic engineering. Both the ETF and its benchmark index undergo quarterly rebalancing and reconstitution in February, May, August, and November.

PBE (Invesco Biotechnology & Genome ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $258.7M, a beta of 0.81 versus the broader market, a 52-week range of 63.79-90.33, average daily share volume of 6K, a public-listing history dating back to 2005. These structural characteristics shape how PBE etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.81 places PBE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PBE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on PBE?

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 PBE snapshot

As of June 25, 2026, spot at $88.31, ATM IV 22.50%, IV rank 28.94%, expected move 6.45%. The collar on PBE 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 PBE specifically: IV regime affects collar pricing on both sides; compressed PBE IV at 22.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.45% (roughly $5.70 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 PBE expiries trade a higher absolute premium for lower per-day decay. Position sizing on PBE should anchor to the underlying notional of $88.31 per share and to the trader's directional view on PBE etf.

PBE collar setup

The PBE 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 PBE near $88.31, the first option leg uses a $93.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PBE 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 PBE shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$88.31	long
Sell 1	Call	$93.00	$0.73
Buy 1	Put	$84.00	$0.27

PBE collar risk and reward

Net Premium / Debit: -$8,785.00
Max Profit (per contract): $515.00
Max Loss (per contract): -$385.00
Breakeven(s): $87.85
Risk / Reward Ratio: 1.338

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.

PBE collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on PBE. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$385.00
$19.53	-77.9%	-$385.00
$39.06	-55.8%	-$385.00
$58.58	-33.7%	-$385.00
$78.11	-11.6%	-$385.00
$97.63	+10.6%	+$515.00
$117.16	+32.7%	+$515.00
$136.68	+54.8%	+$515.00
$156.21	+76.9%	+$515.00
$175.73	+99.0%	+$515.00

When traders use collar on PBE

Collars on PBE hedge an existing long PBE 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.

PBE thesis for this collar

The market-implied 1-standard-deviation range for PBE extends from approximately $82.61 on the downside to $94.01 on the upside. A PBE collar hedges an existing long PBE 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 PBE IV rank near 28.94% 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 PBE at 22.50%. As a Financial Services name, PBE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PBE-specific events.

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

Frequently asked questions

What is a collar on PBE?: A collar on PBE is the collar strategy applied to PBE (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 PBE etf trading near $88.31, the strikes shown on this page are snapped to the nearest listed PBE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PBE 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 PBE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.50%), the computed maximum profit is $515.00 per contract and the computed maximum loss is -$385.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PBE collar?: The breakeven for the PBE collar priced on this page is roughly $87.85 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 PBE market-implied 1-standard-deviation expected move is approximately 6.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on PBE?: Collars on PBE hedge an existing long PBE 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 PBE implied volatility affect this collar?: PBE ATM IV is at 22.50% with IV rank near 28.94%, 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.