TBT Collar Strategy
TBT (ProShares - UltraShort 20+ Year Treasury), in the Financial Services sector, (Asset Management industry), listed on AMEX.
ProShares UltraShort 20+ Year Treasury seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index.
TBT (ProShares - UltraShort 20+ Year Treasury) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $296.9M, a beta of -4.74 versus the broader market, a 52-week range of 31.69-39.7, average daily share volume of 477K, 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 -4.74 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.
Current TBT snapshot
As of May 15, 2026, spot at $37.46, ATM IV 22.30%, IV rank 28.11%, expected move 6.39%. The collar on TBT 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 TBT specifically: IV regime affects collar pricing on both sides; compressed TBT IV at 22.30% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.39% (roughly $2.39 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 TBT expiries trade a higher absolute premium for lower per-day decay. Position sizing on TBT should anchor to the underlying notional of $37.46 per share and to the trader's directional view on TBT etf.
TBT collar setup
The TBT 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 TBT near $37.46, the first option leg uses a $39.00 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 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 TBT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $37.46 | long |
| Sell 1 | Call | $39.00 | $0.53 |
| Buy 1 | Put | $36.00 | $0.43 |
TBT collar risk and reward
- Net Premium / Debit
- -$3,736.00
- Max Profit (per contract)
- $164.00
- Max Loss (per contract)
- -$136.00
- Breakeven(s)
- $37.36
- Risk / Reward Ratio
- 1.206
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% | -$136.00 |
| $8.29 | -77.9% | -$136.00 |
| $16.57 | -55.8% | -$136.00 |
| $24.85 | -33.7% | -$136.00 |
| $33.14 | -11.5% | -$136.00 |
| $41.42 | +10.6% | +$164.00 |
| $49.70 | +32.7% | +$164.00 |
| $57.98 | +54.8% | +$164.00 |
| $66.26 | +76.9% | +$164.00 |
| $74.54 | +99.0% | +$164.00 |
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 $35.07 on the downside to $39.85 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 28.11% 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 22.30%. 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 trading near $37.46, the strikes shown on this page are snapped to the nearest listed TBT chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 22.30%), the computed maximum profit is $164.00 per contract and the computed maximum loss is -$136.00 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 $37.36 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 TBT market-implied 1-standard-deviation expected move is approximately 6.39%; 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 22.30% with IV rank near 28.11%, 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.