RDVI Collar Strategy
RDVI (FT Vest Rising Dividend Achievers Target Income ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
RDVI aims to provide income at an annual rate of 8%, before fees and expenses, over the annual dividend yield of the S&P 500 Index. The sources for income stem from dividends from individual equity positions and premiums from selling naked call options. Selecting the portfolio involves screening a broad market index for those that have a history of raising their dividends, while exhibiting characteristics to continue to do so. Each week, RDVI attempts to bridge the difference between the dividend income of its equity portfolio and its target distribution by selling at-the-money, naked call options on the S&P 500 Index or related ETFs. The income from dividends and option premiums are expected to be distributed monthly. Investors should note that naked call writing, or selling call options without owning the underlying asset, is a high-risk options strategy.
RDVI (FT Vest Rising Dividend Achievers Target Income ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $3.59B, a beta of 0.84 versus the broader market, a 52-week range of 24.77-30.03, average daily share volume of 670K, a public-listing history dating back to 2022. These structural characteristics shape how RDVI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.84 places RDVI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RDVI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on RDVI?
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.
RDVI snapshot
As of August 14, 2026, spot at $29.99, ATM IV 25.80%, IV rank 19.87%, expected move 7.40%. The collar on RDVI below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on RDVI specifically: IV regime affects collar pricing on both sides; compressed RDVI IV at 25.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.40% (roughly $2.22 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDVI expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDVI should anchor to the underlying notional of $29.99 per share and to the trader's directional view on RDVI etf.
RDVI collar setup
The RDVI 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 RDVI at $29.99 on that close, the first option leg uses a $31.49 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDVI chain at a 35-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 RDVI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $29.99 | long |
| Sell 1 | Call | $31.49 | N/A |
| Buy 1 | Put | $28.49 | N/A |
RDVI collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
RDVI collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RDVI. 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.
When traders use collar on RDVI
Collars on RDVI hedge an existing long RDVI 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.
RDVI thesis for this collar
The market-implied 1-standard-deviation range for RDVI extends from approximately $27.77 on the downside to $32.21 on the upside. A RDVI collar hedges an existing long RDVI 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 RDVI IV rank near 19.87% 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 RDVI at 25.80%. As a Financial Services name, RDVI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDVI-specific events.
RDVI 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. RDVI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RDVI alongside the broader basket even when RDVI-specific fundamentals are unchanged. Always rebuild the position from current RDVI chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RDVI?
- A collar on RDVI is the collar strategy applied to RDVI (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 RDVI etf at $29.99 on the most recent close, the strikes shown on this page are snapped to the nearest listed RDVI chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are RDVI 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 RDVI collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RDVI collar?
- The breakeven for the RDVI collar priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The RDVI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.40%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RDVI?
- Collars on RDVI hedge an existing long RDVI 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 RDVI implied volatility affect this collar?
- RDVI ATM IV is at 25.80% with IV rank near 19.87%, 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.