PBW Collar Strategy
PBW (Invesco WilderHill Clean Energy ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Invesco WilderHill Clean Energy ETF (Fund) is based on the WilderHill Clean Energy Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is composed of stocks of companies that are publicly traded in the United States and engaged in the business of advancement of cleaner energy and conservation. The Fund and the Index are rebalanced and reconstituted quarterly.
PBW (Invesco WilderHill Clean Energy ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $540.2M, a beta of 1.96 versus the broader market, a 52-week range of 16.75-42.69, average daily share volume of 915K, a public-listing history dating back to 2005. These structural characteristics shape how PBW etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.96 indicates PBW has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. PBW pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PBW?
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 PBW snapshot
As of May 15, 2026, spot at $41.45, ATM IV 44.20%, IV rank 27.85%, expected move 12.67%. The collar on PBW 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 34-day expiry.
Why this collar structure on PBW specifically: IV regime affects collar pricing on both sides; compressed PBW IV at 44.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 12.67% (roughly $5.25 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PBW expiries trade a higher absolute premium for lower per-day decay. Position sizing on PBW should anchor to the underlying notional of $41.45 per share and to the trader's directional view on PBW etf.
PBW collar setup
The PBW 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 PBW near $41.45, the first option leg uses a $44.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PBW chain at a 34-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 PBW shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $41.45 | long |
| Sell 1 | Call | $44.00 | $1.18 |
| Buy 1 | Put | $39.00 | $1.40 |
PBW collar risk and reward
- Net Premium / Debit
- -$4,167.50
- Max Profit (per contract)
- $232.50
- Max Loss (per contract)
- -$267.50
- Breakeven(s)
- $41.68
- Risk / Reward Ratio
- 0.869
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.
PBW collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PBW. 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% | -$267.50 |
| $9.17 | -77.9% | -$267.50 |
| $18.34 | -55.8% | -$267.50 |
| $27.50 | -33.7% | -$267.50 |
| $36.66 | -11.5% | -$267.50 |
| $45.83 | +10.6% | +$232.50 |
| $54.99 | +32.7% | +$232.50 |
| $64.16 | +54.8% | +$232.50 |
| $73.32 | +76.9% | +$232.50 |
| $82.48 | +99.0% | +$232.50 |
When traders use collar on PBW
Collars on PBW hedge an existing long PBW 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.
PBW thesis for this collar
The market-implied 1-standard-deviation range for PBW extends from approximately $36.20 on the downside to $46.70 on the upside. A PBW collar hedges an existing long PBW 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 PBW IV rank near 27.85% 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 PBW at 44.20%. As a Financial Services name, PBW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PBW-specific events.
PBW 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. PBW positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PBW alongside the broader basket even when PBW-specific fundamentals are unchanged. Always rebuild the position from current PBW chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PBW?
- A collar on PBW is the collar strategy applied to PBW (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 PBW etf trading near $41.45, the strikes shown on this page are snapped to the nearest listed PBW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PBW 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 PBW collar priced from the end-of-day chain at a 30-day expiry (ATM IV 44.20%), the computed maximum profit is $232.50 per contract and the computed maximum loss is -$267.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PBW collar?
- The breakeven for the PBW collar priced on this page is roughly $41.68 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 PBW market-implied 1-standard-deviation expected move is approximately 12.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PBW?
- Collars on PBW hedge an existing long PBW 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 PBW implied volatility affect this collar?
- PBW ATM IV is at 44.20% with IV rank near 27.85%, 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.