TBT Collar Strategy
TBT (ProShares - UltraShort 20+ Year Treasury), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
This ProShares UltraShort 20+ Year Treasury fund is designed to achieve daily investment returns. Its goal is to mirror, with a double inverse (-2x) leverage, the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. All stated results are calculated before any fees and expenses are applied.
TBT (ProShares - UltraShort 20+ Year Treasury) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $360.1M, a beta of -4.80 versus the broader market, a 52-week range of 31.69-38.8, average daily share volume of 463K, a public-listing history dating back to 2008. These structural characteristics shape how TBT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -4.80 indicates TBT has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TBT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on TBT?
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.
TBT snapshot
As of August 14, 2026, spot at $38.50, ATM IV 20.10%, IV rank 3.26%, expected move 5.76%. The collar on TBT below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on TBT specifically: IV regime affects collar pricing on both sides; compressed TBT IV at 20.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.76% (roughly $2.22 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TBT expiries trade a higher absolute premium for lower per-day decay. Position sizing on TBT should anchor to the underlying notional of $38.50 per share and to the trader's directional view on TBT etf.
TBT collar setup
The TBT collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TBT at $38.50 on that close, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TBT chain at a 35-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 TBT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $38.50 | long |
| Sell 1 | Call | $40.00 | $0.50 |
| Buy 1 | Put | $37.00 | $0.33 |
TBT collar risk and reward
- Net Premium / Debit
- -$3,832.50
- Max Profit (per contract)
- $167.50
- Max Loss (per contract)
- -$132.50
- Breakeven(s)
- $38.32
- Risk / Reward Ratio
- 1.264
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.
TBT collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on TBT. 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% | -$132.50 |
| $8.52 | -77.9% | -$132.50 |
| $17.03 | -55.8% | -$132.50 |
| $25.54 | -33.7% | -$132.50 |
| $34.06 | -11.5% | -$132.50 |
| $42.57 | +10.6% | +$167.50 |
| $51.08 | +32.7% | +$167.50 |
| $59.59 | +54.8% | +$167.50 |
| $68.10 | +76.9% | +$167.50 |
| $76.61 | +99.0% | +$167.50 |
When traders use collar on TBT
Collars on TBT hedge an existing long TBT 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.
TBT thesis for this collar
The market-implied 1-standard-deviation range for TBT extends from approximately $36.28 on the downside to $40.72 on the upside. A TBT collar hedges an existing long TBT 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 TBT IV rank near 3.26% 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 TBT at 20.10%. As a Financial Services name, TBT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TBT-specific events.
TBT 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. TBT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TBT alongside the broader basket even when TBT-specific fundamentals are unchanged. Always rebuild the position from current TBT chain quotes before placing a trade.
Frequently asked questions
- What is a collar on TBT?
- A collar on TBT is the collar strategy applied to TBT (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 TBT etf at $38.50 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed TBT chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are TBT 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 TBT collar priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 20.10%), the computed maximum profit is $167.50 per contract and the computed maximum loss is -$132.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TBT collar?
- The breakeven for the TBT collar priced on this page is roughly $38.32 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The TBT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on TBT?
- Collars on TBT hedge an existing long TBT 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 TBT implied volatility affect this collar?
- TBT ATM IV is at 20.10% with IV rank near 3.26%, 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.