SMN Collar Strategy
SMN (ProShares - UltraShort Materials), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
ProShares UltraShort Materials seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the S&P Materials Select SectorSM Index.
SMN (ProShares - UltraShort Materials) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $679,620, a beta of -1.57 versus the broader market, a 52-week range of 9.23-15.51, average daily share volume of 19K, a public-listing history dating back to 2007. These structural characteristics shape how SMN etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -1.57 indicates SMN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SMN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on SMN?
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 SMN snapshot
As of May 15, 2026, spot at $10.49, ATM IV 75.80%, IV rank 31.22%, expected move 21.73%. The collar on SMN 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 SMN specifically: IV regime affects collar pricing on both sides; mid-range SMN IV at 75.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 21.73% (roughly $2.28 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 SMN expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMN should anchor to the underlying notional of $10.49 per share and to the trader's directional view on SMN etf.
SMN collar setup
The SMN 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 SMN near $10.49, the first option leg uses a $11.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMN 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 SMN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $10.49 | long |
| Sell 1 | Call | $11.00 | $0.93 |
| Buy 1 | Put | $10.00 | $0.85 |
SMN collar risk and reward
- Net Premium / Debit
- -$1,041.00
- Max Profit (per contract)
- $59.00
- Max Loss (per contract)
- -$41.00
- Breakeven(s)
- $10.41
- Risk / Reward Ratio
- 1.439
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.
SMN collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on SMN. 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% | -$41.00 |
| $2.33 | -77.8% | -$41.00 |
| $4.65 | -55.7% | -$41.00 |
| $6.96 | -33.6% | -$41.00 |
| $9.28 | -11.5% | -$41.00 |
| $11.60 | +10.6% | +$59.00 |
| $13.92 | +32.7% | +$59.00 |
| $16.24 | +54.8% | +$59.00 |
| $18.56 | +76.9% | +$59.00 |
| $20.87 | +99.0% | +$59.00 |
When traders use collar on SMN
Collars on SMN hedge an existing long SMN 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.
SMN thesis for this collar
The market-implied 1-standard-deviation range for SMN extends from approximately $8.21 on the downside to $12.77 on the upside. A SMN collar hedges an existing long SMN 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 SMN IV rank near 31.22% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on SMN should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SMN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMN-specific events.
SMN 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. SMN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SMN alongside the broader basket even when SMN-specific fundamentals are unchanged. Always rebuild the position from current SMN chain quotes before placing a trade.
Frequently asked questions
- What is a collar on SMN?
- A collar on SMN is the collar strategy applied to SMN (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 SMN etf trading near $10.49, the strikes shown on this page are snapped to the nearest listed SMN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SMN 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 SMN collar priced from the end-of-day chain at a 30-day expiry (ATM IV 75.80%), the computed maximum profit is $59.00 per contract and the computed maximum loss is -$41.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SMN collar?
- The breakeven for the SMN collar priced on this page is roughly $10.41 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 SMN market-implied 1-standard-deviation expected move is approximately 21.73%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on SMN?
- Collars on SMN hedge an existing long SMN 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 SMN implied volatility affect this collar?
- SMN ATM IV is at 75.80% with IV rank near 31.22%, 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.