SMDD Collar Strategy
SMDD (ProShares - UltraPro Short MidCap400), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The ProShares UltraPro Short MidCap400 fund endeavors to produce daily financial outcomes that precisely track three times the inverse daily movement of the S&P MidCap 400 index. It's important to note that these figures represent gross returns, prior to any deductions for fees or operational expenses.
SMDD (ProShares - UltraPro Short MidCap400) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $2.1M, a beta of -3.00 versus the broader market, a 52-week range of 7.48-16.15, average daily share volume of 12K, a public-listing history dating back to 2010. These structural characteristics shape how SMDD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -3.00 indicates SMDD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SMDD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SMDD?
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 SMDD snapshot
As of June 30, 2026, spot at $7.47, ATM IV 137.90%, IV rank 46.63%, expected move 39.53%. The collar on SMDD 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 17-day expiry.
Why this collar structure on SMDD specifically: IV regime affects collar pricing on both sides; mid-range SMDD IV at 137.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 39.53% (roughly $2.95 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SMDD expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMDD should anchor to the underlying notional of $7.47 per share and to the trader's directional view on SMDD etf.
SMDD collar setup
The SMDD 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 SMDD near $7.47, the first option leg uses a $7.84 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMDD chain at a 17-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 SMDD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.47 | long |
| Sell 1 | Call | $7.84 | N/A |
| Buy 1 | Put | $7.10 | N/A |
SMDD 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.
SMDD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SMDD. 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 SMDD
Collars on SMDD hedge an existing long SMDD 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.
SMDD thesis for this collar
The market-implied 1-standard-deviation range for SMDD extends from approximately $4.52 on the downside to $10.42 on the upside. A SMDD collar hedges an existing long SMDD 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 SMDD IV rank near 46.63% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on SMDD should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SMDD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMDD-specific events.
SMDD 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. SMDD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SMDD alongside the broader basket even when SMDD-specific fundamentals are unchanged. Always rebuild the position from current SMDD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SMDD?
- A collar on SMDD is the collar strategy applied to SMDD (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 SMDD etf trading near $7.47, the strikes shown on this page are snapped to the nearest listed SMDD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SMDD 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 SMDD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 137.90%), 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 SMDD collar?
- The breakeven for the SMDD collar priced on this page is no defined breakeven on the modeled curve 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 SMDD market-implied 1-standard-deviation expected move is approximately 39.53%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SMDD?
- Collars on SMDD hedge an existing long SMDD 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 SMDD implied volatility affect this collar?
- SMDD ATM IV is at 137.90% with IV rank near 46.63%, 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.