RDVY Collar Strategy
RDVY (First Trust Rising Dividend Achievers ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The Fund seeks investment results that correspond generally to the price and yield (before the fees and expenses) of the Nasdaq US Rising Dividend Achievers Index (the "Index"). The Fund will normally invest at least 90% of its net assets (plus the amount of any borrowings for investment purposes) in securities that comprise the Index. The Index is comprised of a selection of companies with a history of raising their dividends and that exhibit the characteristics to potentially continue doing so in the future. The Index construction process considers a company's earnings growth, levels of cash compared to debt and the amount of earnings that are paid out as dividends.
RDVY (First Trust Rising Dividend Achievers ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $21.90B, a beta of 1.04 versus the broader market, a 52-week range of 59.01-75.747, average daily share volume of 1.4M, a public-listing history dating back to 2014. These structural characteristics shape how RDVY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.04 places RDVY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RDVY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on RDVY?
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 RDVY snapshot
As of May 15, 2026, spot at $73.73, ATM IV 19.10%, IV rank 1.72%, expected move 5.48%. The collar on RDVY 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 63-day expiry.
Why this collar structure on RDVY specifically: IV regime affects collar pricing on both sides; compressed RDVY IV at 19.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.48% (roughly $4.04 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDVY expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDVY should anchor to the underlying notional of $73.73 per share and to the trader's directional view on RDVY etf.
RDVY collar setup
The RDVY 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 RDVY near $73.73, the first option leg uses a $77.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDVY chain at a 63-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 RDVY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $73.73 | long |
| Sell 1 | Call | $77.00 | $1.04 |
| Buy 1 | Put | $70.00 | $0.82 |
RDVY collar risk and reward
- Net Premium / Debit
- -$7,351.00
- Max Profit (per contract)
- $349.00
- Max Loss (per contract)
- -$351.00
- Breakeven(s)
- $73.51
- Risk / Reward Ratio
- 0.994
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.
RDVY collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RDVY. 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% | -$351.00 |
| $16.31 | -77.9% | -$351.00 |
| $32.61 | -55.8% | -$351.00 |
| $48.91 | -33.7% | -$351.00 |
| $65.21 | -11.6% | -$351.00 |
| $81.52 | +10.6% | +$349.00 |
| $97.82 | +32.7% | +$349.00 |
| $114.12 | +54.8% | +$349.00 |
| $130.42 | +76.9% | +$349.00 |
| $146.72 | +99.0% | +$349.00 |
When traders use collar on RDVY
Collars on RDVY hedge an existing long RDVY 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.
RDVY thesis for this collar
The market-implied 1-standard-deviation range for RDVY extends from approximately $69.69 on the downside to $77.77 on the upside. A RDVY collar hedges an existing long RDVY 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 RDVY IV rank near 1.72% 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 RDVY at 19.10%. As a Financial Services name, RDVY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDVY-specific events.
RDVY 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. RDVY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RDVY alongside the broader basket even when RDVY-specific fundamentals are unchanged. Always rebuild the position from current RDVY chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RDVY?
- A collar on RDVY is the collar strategy applied to RDVY (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 RDVY etf trading near $73.73, the strikes shown on this page are snapped to the nearest listed RDVY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RDVY 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 RDVY collar priced from the end-of-day chain at a 30-day expiry (ATM IV 19.10%), the computed maximum profit is $349.00 per contract and the computed maximum loss is -$351.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RDVY collar?
- The breakeven for the RDVY collar priced on this page is roughly $73.51 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 RDVY market-implied 1-standard-deviation expected move is approximately 5.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RDVY?
- Collars on RDVY hedge an existing long RDVY 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 RDVY implied volatility affect this collar?
- RDVY ATM IV is at 19.10% with IV rank near 1.72%, 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.