PSCM Collar Strategy
PSCM (Invesco S&P SmallCap Materials ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. These companies are principally engaged in the business of producing raw materials, including producing and manufacturing chemical products; manufacturing construction materials, containers, and packaging; mining metals and the production of related products; and manufacturing paper and forest products. The fund is non-diversified.
PSCM (Invesco S&P SmallCap Materials ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $21.1M, a beta of 1.14 versus the broader market, a 52-week range of 68.82-110.02, average daily share volume of 3K, a public-listing history dating back to 2010. These structural characteristics shape how PSCM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.14 places PSCM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PSCM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on PSCM?
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 PSCM snapshot
As of June 29, 2026, spot at $102.50, ATM IV 28.40%, IV rank 2.70%, expected move 8.14%. The collar on PSCM 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 PSCM specifically: IV regime affects collar pricing on both sides; compressed PSCM IV at 28.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.14% (roughly $8.35 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 PSCM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PSCM should anchor to the underlying notional of $102.50 per share and to the trader's directional view on PSCM etf.
PSCM collar setup
The PSCM 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 PSCM near $102.50, the first option leg uses a $108.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PSCM 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 PSCM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $102.50 | long |
| Sell 1 | Call | $108.00 | $0.59 |
| Buy 1 | Put | $97.00 | $0.71 |
PSCM collar risk and reward
- Net Premium / Debit
- -$10,262.00
- Max Profit (per contract)
- $538.00
- Max Loss (per contract)
- -$562.00
- Breakeven(s)
- $102.62
- Risk / Reward Ratio
- 0.957
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.
PSCM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on PSCM. 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% | -$562.00 |
| $22.67 | -77.9% | -$562.00 |
| $45.33 | -55.8% | -$562.00 |
| $68.00 | -33.7% | -$562.00 |
| $90.66 | -11.6% | -$562.00 |
| $113.32 | +10.6% | +$538.00 |
| $135.98 | +32.7% | +$538.00 |
| $158.65 | +54.8% | +$538.00 |
| $181.31 | +76.9% | +$538.00 |
| $203.97 | +99.0% | +$538.00 |
When traders use collar on PSCM
Collars on PSCM hedge an existing long PSCM 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.
PSCM thesis for this collar
The market-implied 1-standard-deviation range for PSCM extends from approximately $94.15 on the downside to $110.85 on the upside. A PSCM collar hedges an existing long PSCM 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 PSCM IV rank near 2.70% 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 PSCM at 28.40%. As a Financial Services name, PSCM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PSCM-specific events.
PSCM 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. PSCM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PSCM alongside the broader basket even when PSCM-specific fundamentals are unchanged. Always rebuild the position from current PSCM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on PSCM?
- A collar on PSCM is the collar strategy applied to PSCM (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 PSCM etf trading near $102.50, the strikes shown on this page are snapped to the nearest listed PSCM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PSCM 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 PSCM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.40%), the computed maximum profit is $538.00 per contract and the computed maximum loss is -$562.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PSCM collar?
- The breakeven for the PSCM collar priced on this page is roughly $102.62 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 PSCM market-implied 1-standard-deviation expected move is approximately 8.14%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on PSCM?
- Collars on PSCM hedge an existing long PSCM 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 PSCM implied volatility affect this collar?
- PSCM ATM IV is at 28.40% with IV rank near 2.70%, 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.