SKYY Collar Strategy
SKYY (First Trust Cloud Computing ETF), in the Financial Services sector, (Asset Management - Bonds industry), listed on NASDAQ.
The First Trust Cloud Computing ETF is an exchange-traded fund whose primary goal is to replicate the financial performance, encompassing both price movements and dividend income, of the ISE CTA Cloud Computing Index. This objective is pursued before accounting for the fund's internal fees and operational costs.
SKYY (First Trust Cloud Computing ETF) trades in the Financial Services sector, specifically Asset Management - Bonds, with a market capitalization of approximately $2.07B, a beta of 1.26 versus the broader market, a 52-week range of 103.76-155.76, average daily share volume of 368K, a public-listing history dating back to 2011. These structural characteristics shape how SKYY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.26 places SKYY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on SKYY?
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 SKYY snapshot
As of June 29, 2026, spot at $132.87, ATM IV 35.90%, IV rank 60.36%, expected move 10.29%. The collar on SKYY 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 18-day expiry.
Why this collar structure on SKYY specifically: IV regime affects collar pricing on both sides; mid-range SKYY IV at 35.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.29% (roughly $13.68 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SKYY expiries trade a higher absolute premium for lower per-day decay. Position sizing on SKYY should anchor to the underlying notional of $132.87 per share and to the trader's directional view on SKYY etf.
SKYY collar setup
The SKYY 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 SKYY near $132.87, the first option leg uses a $140.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SKYY chain at a 18-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 SKYY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $132.87 | long |
| Sell 1 | Call | $140.00 | $2.38 |
| Buy 1 | Put | $126.00 | $1.65 |
SKYY collar risk and reward
- Net Premium / Debit
- -$13,214.50
- Max Profit (per contract)
- $785.50
- Max Loss (per contract)
- -$614.50
- Breakeven(s)
- $132.14
- Risk / Reward Ratio
- 1.278
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.
SKYY collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SKYY. 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% | -$614.50 |
| $29.39 | -77.9% | -$614.50 |
| $58.76 | -55.8% | -$614.50 |
| $88.14 | -33.7% | -$614.50 |
| $117.52 | -11.6% | -$614.50 |
| $146.90 | +10.6% | +$785.50 |
| $176.27 | +32.7% | +$785.50 |
| $205.65 | +54.8% | +$785.50 |
| $235.03 | +76.9% | +$785.50 |
| $264.40 | +99.0% | +$785.50 |
When traders use collar on SKYY
Collars on SKYY hedge an existing long SKYY 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.
SKYY thesis for this collar
The market-implied 1-standard-deviation range for SKYY extends from approximately $119.19 on the downside to $146.55 on the upside. A SKYY collar hedges an existing long SKYY 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 SKYY IV rank near 60.36% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on SKYY should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SKYY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SKYY-specific events.
SKYY 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. SKYY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SKYY alongside the broader basket even when SKYY-specific fundamentals are unchanged. Always rebuild the position from current SKYY chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SKYY?
- A collar on SKYY is the collar strategy applied to SKYY (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 SKYY etf trading near $132.87, the strikes shown on this page are snapped to the nearest listed SKYY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SKYY 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 SKYY collar priced from the end-of-day chain at a 30-day expiry (ATM IV 35.90%), the computed maximum profit is $785.50 per contract and the computed maximum loss is -$614.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SKYY collar?
- The breakeven for the SKYY collar priced on this page is roughly $132.14 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 SKYY market-implied 1-standard-deviation expected move is approximately 10.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SKYY?
- Collars on SKYY hedge an existing long SKYY 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 SKYY implied volatility affect this collar?
- SKYY ATM IV is at 35.90% with IV rank near 60.36%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.