How are PSP 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 PSP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 15.10%), the computed maximum profit is $223.00 per contract and the computed maximum loss is -$177.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PSP collar?

The breakeven for the PSP collar priced on this page is roughly $56.77 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 PSP market-implied 1-standard-deviation expected move is approximately 4.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PSP implied volatility affect this collar?

PSP ATM IV is at 15.10% with IV rank near 9.81%, 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.

PSP Collar Strategy

PSP (Invesco Global Listed Private Equity ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco Global Listed Private Equity ETF (referred to as the Fund) aims to mirror the performance of the Red Rocks Global Listed Private Equity Index (the Index). Typically, the Fund allocates at least 90% of its assets to the securities found within this Index, which encompass American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). The Index itself is composed of 40 to 75 publicly traded private equity firms, including business development companies (BDCs) and other entities primarily engaged in investing in, financing, or servicing privately held enterprises. Both the Fund and the Index undergo quarterly rebalancing and reconstitution. It's important to note that Master Limited Partnerships (MLPs) are explicitly excluded from the Underlying Index. Morningstar Inc. reported the Fund's performance as of August 31, 2025.

PSP (Invesco Global Listed Private Equity ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $270.5M, a beta of 1.18 versus the broader market, a 52-week range of 54.12-72.97, average daily share volume of 54K, a public-listing history dating back to 2006. These structural characteristics shape how PSP etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.18 places PSP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PSP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on PSP?

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 PSP snapshot

As of June 30, 2026, spot at $55.72, ATM IV 15.10%, IV rank 9.81%, expected move 4.33%. The collar on PSP 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 80-day expiry.

Why this collar structure on PSP specifically: IV regime affects collar pricing on both sides; compressed PSP IV at 15.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 4.33% (roughly $2.41 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PSP expiries trade a higher absolute premium for lower per-day decay. Position sizing on PSP should anchor to the underlying notional of $55.72 per share and to the trader's directional view on PSP etf.

PSP collar setup

The PSP 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 PSP near $55.72, the first option leg uses a $59.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PSP chain at a 80-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 PSP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$55.72	long
Sell 1	Call	$59.00	$1.35
Buy 1	Put	$55.00	$2.40

PSP collar risk and reward

Net Premium / Debit: -$5,677.00
Max Profit (per contract): $223.00
Max Loss (per contract): -$177.00
Breakeven(s): $56.77
Risk / Reward Ratio: 1.260

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.

PSP collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on PSP. 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%	-$177.00
$12.33	-77.9%	-$177.00
$24.65	-55.8%	-$177.00
$36.97	-33.7%	-$177.00
$49.29	-11.5%	-$177.00
$61.60	+10.6%	+$223.00
$73.92	+32.7%	+$223.00
$86.24	+54.8%	+$223.00
$98.56	+76.9%	+$223.00
$110.88	+99.0%	+$223.00

When traders use collar on PSP

Collars on PSP hedge an existing long PSP 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.

PSP thesis for this collar

The market-implied 1-standard-deviation range for PSP extends from approximately $53.31 on the downside to $58.13 on the upside. A PSP collar hedges an existing long PSP 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 PSP IV rank near 9.81% 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 PSP at 15.10%. As a Financial Services name, PSP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PSP-specific events.

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

Frequently asked questions

What is a collar on PSP?: A collar on PSP is the collar strategy applied to PSP (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 PSP etf trading near $55.72, the strikes shown on this page are snapped to the nearest listed PSP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PSP 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 PSP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 15.10%), the computed maximum profit is $223.00 per contract and the computed maximum loss is -$177.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PSP collar?: The breakeven for the PSP collar priced on this page is roughly $56.77 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 PSP market-implied 1-standard-deviation expected move is approximately 4.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on PSP?: Collars on PSP hedge an existing long PSP 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 PSP implied volatility affect this collar?: PSP ATM IV is at 15.10% with IV rank near 9.81%, 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.