SDP Collar Strategy
SDP (ProShares - UltraShort Utilities), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
ProShares UltraShort Utilities seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the S&P Utilities Select SectorSM Index.
SDP (ProShares - UltraShort Utilities) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $4.3M, a beta of -0.95 versus the broader market, a 52-week range of 9.89-15.37, average daily share volume of 15K, 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 -0.95 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 May 15, 2026, spot at $11.66, ATM IV 23.20%, IV rank 1.42%, expected move 6.65%. 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 34-day expiry.
Why this collar structure on SDP specifically: IV regime affects collar pricing on both sides; compressed SDP IV at 23.20% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.65% (roughly $0.78 on the underlying). The 34-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 $11.66 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 $11.66, the first option leg uses a $12.00 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 34-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 | $11.66 | long |
| Sell 1 | Call | $12.00 | $0.49 |
| Buy 1 | Put | $11.00 | $0.34 |
SDP collar risk and reward
- Net Premium / Debit
- -$1,151.00
- Max Profit (per contract)
- $49.00
- Max Loss (per contract)
- -$51.00
- Breakeven(s)
- $11.51
- Risk / Reward Ratio
- 0.961
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 | -99.9% | -$51.00 |
| $2.59 | -77.8% | -$51.00 |
| $5.16 | -55.7% | -$51.00 |
| $7.74 | -33.6% | -$51.00 |
| $10.32 | -11.5% | -$51.00 |
| $12.89 | +10.6% | +$49.00 |
| $15.47 | +32.7% | +$49.00 |
| $18.05 | +54.8% | +$49.00 |
| $20.63 | +76.9% | +$49.00 |
| $23.20 | +99.0% | +$49.00 |
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 $10.88 on the downside to $12.44 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 1.42% 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 23.20%. 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 $11.66, 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 23.20%), the computed maximum profit is $49.00 per contract and the computed maximum loss is -$51.00 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 $11.51 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 SDP market-implied 1-standard-deviation expected move is approximately 6.65%; 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 23.20% with IV rank near 1.42%, 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.