SDP Collar Strategy
SDP (ProShares - UltraShort Utilities), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
ProShares UltraShort Utilities is structured to produce daily investment outcomes that are twice the inverse (-2x) of the S&P Utilities Select SectorSM Index's daily performance, calculated prior to the subtraction of fees and operational costs.
SDP (ProShares - UltraShort Utilities) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $4.0M, a beta of -0.80 versus the broader market, a 52-week range of 19.78-28.68, average daily share volume of 4K, a public-listing history dating back to 2007. These structural characteristics shape how SDP etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.80 indicates SDP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SDP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SDP?
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 SDP snapshot
As of June 30, 2026, spot at $21.35, ATM IV 48.10%, IV rank 7.22%, expected move 13.79%. The collar on SDP 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 234-day expiry.
Why this collar structure on SDP specifically: IV regime affects collar pricing on both sides; compressed SDP IV at 48.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 13.79% (roughly $2.94 on the underlying). The 234-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SDP expiries trade a higher absolute premium for lower per-day decay. Position sizing on SDP should anchor to the underlying notional of $21.35 per share and to the trader's directional view on SDP etf.
SDP collar setup
The SDP 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 SDP near $21.35, the first option leg uses a $22.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SDP chain at a 234-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 SDP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $21.35 | long |
| Sell 1 | Call | $22.00 | $2.85 |
| Buy 1 | Put | $20.00 | $2.50 |
SDP collar risk and reward
- Net Premium / Debit
- -$2,100.00
- Max Profit (per contract)
- $100.00
- Max Loss (per contract)
- -$100.00
- Breakeven(s)
- $21.00
- Risk / Reward Ratio
- 1.000
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.
SDP collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SDP. 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% | -$100.00 |
| $4.73 | -77.8% | -$100.00 |
| $9.45 | -55.7% | -$100.00 |
| $14.17 | -33.6% | -$100.00 |
| $18.89 | -11.5% | -$100.00 |
| $23.61 | +10.6% | +$100.00 |
| $28.33 | +32.7% | +$100.00 |
| $33.05 | +54.8% | +$100.00 |
| $37.77 | +76.9% | +$100.00 |
| $42.49 | +99.0% | +$100.00 |
When traders use collar on SDP
Collars on SDP hedge an existing long SDP 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.
SDP thesis for this collar
The market-implied 1-standard-deviation range for SDP extends from approximately $18.41 on the downside to $24.29 on the upside. A SDP collar hedges an existing long SDP 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 SDP IV rank near 7.22% 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 SDP at 48.10%. As a Financial Services name, SDP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SDP-specific events.
SDP 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. SDP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SDP alongside the broader basket even when SDP-specific fundamentals are unchanged. Always rebuild the position from current SDP chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SDP?
- A collar on SDP is the collar strategy applied to SDP (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 SDP etf trading near $21.35, the strikes shown on this page are snapped to the nearest listed SDP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SDP 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 SDP collar priced from the end-of-day chain at a 30-day expiry (ATM IV 48.10%), the computed maximum profit is $100.00 per contract and the computed maximum loss is -$100.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SDP collar?
- The breakeven for the SDP collar priced on this page is roughly $21.00 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 SDP market-implied 1-standard-deviation expected move is approximately 13.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SDP?
- Collars on SDP hedge an existing long SDP 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 SDP implied volatility affect this collar?
- SDP ATM IV is at 48.10% with IV rank near 7.22%, 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.