TYD Collar Strategy
TYD (Direxion Daily 7-10 Year Treasury Bull 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
Direxion's Daily 7-10 Year Treasury Bull & Bear 3X ETFs are designed to provide daily returns, before any fees or expenses, that are three times (300%) the performance of the ICE U.S. Treasury 7-10 Year Bond Index. Alternatively, for the "bear" version, they aim for three times the inverse (opposite) of that index's daily performance. However, there is no assurance that these funds will successfully achieve their intended investment goals.
TYD (Direxion Daily 7-10 Year Treasury Bull 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $34.8M, a beta of 3.50 versus the broader market, a 52-week range of 22.78-26.86, average daily share volume of 23K, a public-listing history dating back to 2009. These structural characteristics shape how TYD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.50 indicates TYD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. TYD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on TYD?
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 TYD snapshot
As of June 29, 2026, spot at $24.09, ATM IV 8.10%, IV rank 1.89%, expected move 2.32%. The collar on TYD 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 18-day expiry.
Why this collar structure on TYD specifically: IV regime affects collar pricing on both sides; compressed TYD IV at 8.10% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 2.32% (roughly $0.56 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TYD expiries trade a higher absolute premium for lower per-day decay. Position sizing on TYD should anchor to the underlying notional of $24.09 per share and to the trader's directional view on TYD etf.
TYD collar setup
The TYD 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 TYD near $24.09, the first option leg uses a $25.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TYD chain at a 18-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 TYD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $24.09 | long |
| Sell 1 | Call | $25.00 | $0.04 |
| Buy 1 | Put | $23.00 | $0.02 |
TYD collar risk and reward
- Net Premium / Debit
- -$2,407.00
- Max Profit (per contract)
- $93.00
- Max Loss (per contract)
- -$107.00
- Breakeven(s)
- $24.07
- Risk / Reward Ratio
- 0.869
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.
TYD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on TYD. 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% | -$107.00 |
| $5.34 | -77.9% | -$107.00 |
| $10.66 | -55.7% | -$107.00 |
| $15.99 | -33.6% | -$107.00 |
| $21.31 | -11.5% | -$107.00 |
| $26.64 | +10.6% | +$93.00 |
| $31.96 | +32.7% | +$93.00 |
| $37.29 | +54.8% | +$93.00 |
| $42.61 | +76.9% | +$93.00 |
| $47.94 | +99.0% | +$93.00 |
When traders use collar on TYD
Collars on TYD hedge an existing long TYD 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.
TYD thesis for this collar
The market-implied 1-standard-deviation range for TYD extends from approximately $23.53 on the downside to $24.65 on the upside. A TYD collar hedges an existing long TYD 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 TYD IV rank near 1.89% 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 TYD at 8.10%. As a Financial Services name, TYD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TYD-specific events.
TYD 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. TYD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TYD alongside the broader basket even when TYD-specific fundamentals are unchanged. Always rebuild the position from current TYD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on TYD?
- A collar on TYD is the collar strategy applied to TYD (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 TYD etf trading near $24.09, the strikes shown on this page are snapped to the nearest listed TYD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TYD 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 TYD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 8.10%), the computed maximum profit is $93.00 per contract and the computed maximum loss is -$107.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TYD collar?
- The breakeven for the TYD collar priced on this page is roughly $24.07 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 TYD market-implied 1-standard-deviation expected move is approximately 2.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on TYD?
- Collars on TYD hedge an existing long TYD 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 TYD implied volatility affect this collar?
- TYD ATM IV is at 8.10% with IV rank near 1.89%, 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.