TMF Collar Strategy
TMF (Direxion Daily 20+ Year Treasury Bull 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily 20+ Year Treasury Bull & Bear 3X ETFs endeavor to achieve daily investment outcomes, before accounting for fees and expenses. Specifically, these outcomes aim to replicate either 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index, or 300% of its inverse (opposite) movement. Investors should be aware that the successful attainment of these precise daily objectives is not guaranteed.
TMF (Direxion Daily 20+ Year Treasury Bull 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $2.60B, a beta of 7.17 versus the broader market, a 52-week range of 31.58-44.24, average daily share volume of 3.7M, a public-listing history dating back to 2009. These structural characteristics shape how TMF etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 7.17 indicates TMF has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. TMF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on TMF?
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 TMF snapshot
As of June 30, 2026, spot at $35.75, ATM IV 24.80%, IV rank 11.45%, expected move 7.11%. The collar on TMF 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 31-day expiry.
Why this collar structure on TMF specifically: IV regime affects collar pricing on both sides; compressed TMF IV at 24.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.11% (roughly $2.54 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TMF expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMF should anchor to the underlying notional of $35.75 per share and to the trader's directional view on TMF etf.
TMF collar setup
The TMF 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 TMF near $35.75, the first option leg uses a $37.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMF chain at a 31-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 TMF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $35.75 | long |
| Sell 1 | Call | $37.50 | $0.44 |
| Buy 1 | Put | $34.00 | $0.38 |
TMF collar risk and reward
- Net Premium / Debit
- -$3,569.00
- Max Profit (per contract)
- $181.00
- Max Loss (per contract)
- -$169.00
- Breakeven(s)
- $35.69
- Risk / Reward Ratio
- 1.071
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.
TMF collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on TMF. 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% | -$169.00 |
| $7.91 | -77.9% | -$169.00 |
| $15.82 | -55.8% | -$169.00 |
| $23.72 | -33.6% | -$169.00 |
| $31.62 | -11.5% | -$169.00 |
| $39.53 | +10.6% | +$181.00 |
| $47.43 | +32.7% | +$181.00 |
| $55.33 | +54.8% | +$181.00 |
| $63.24 | +76.9% | +$181.00 |
| $71.14 | +99.0% | +$181.00 |
When traders use collar on TMF
Collars on TMF hedge an existing long TMF 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.
TMF thesis for this collar
The market-implied 1-standard-deviation range for TMF extends from approximately $33.21 on the downside to $38.29 on the upside. A TMF collar hedges an existing long TMF 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 TMF IV rank near 11.45% 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 TMF at 24.80%. As a Financial Services name, TMF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMF-specific events.
TMF 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. TMF positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TMF alongside the broader basket even when TMF-specific fundamentals are unchanged. Always rebuild the position from current TMF chain quotes before placing a trade.
Frequently asked questions
- What is a collar on TMF?
- A collar on TMF is the collar strategy applied to TMF (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 TMF etf trading near $35.75, the strikes shown on this page are snapped to the nearest listed TMF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TMF 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 TMF collar priced from the end-of-day chain at a 30-day expiry (ATM IV 24.80%), the computed maximum profit is $181.00 per contract and the computed maximum loss is -$169.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TMF collar?
- The breakeven for the TMF collar priced on this page is roughly $35.69 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 TMF market-implied 1-standard-deviation expected move is approximately 7.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on TMF?
- Collars on TMF hedge an existing long TMF 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 TMF implied volatility affect this collar?
- TMF ATM IV is at 24.80% with IV rank near 11.45%, 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.