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.
The Direxion Daily 7-10 Year Treasury Bull & Bear 3X ETFs seek daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the ICE U.S. Treasury 7-10 Year Bond Index. There is no guarantee the funds will achieve their stated investment objectives.
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 $36.0M, a beta of 3.50 versus the broader market, a 52-week range of 23.56-26.86, average daily share volume of 29K, 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 May 15, 2026, spot at $23.25, ATM IV 19.60%, IV rank 4.95%, expected move 5.62%. 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 34-day expiry.
Why this collar structure on TYD specifically: IV regime affects collar pricing on both sides; compressed TYD IV at 19.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 5.62% (roughly $1.31 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 TYD expiries trade a higher absolute premium for lower per-day decay. Position sizing on TYD should anchor to the underlying notional of $23.25 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 $23.25, the first option leg uses a $24.00 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 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 TYD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $23.25 | long |
| Sell 1 | Call | $24.00 | $0.25 |
| Buy 1 | Put | $22.00 | $0.15 |
TYD collar risk and reward
- Net Premium / Debit
- -$2,315.00
- Max Profit (per contract)
- $85.00
- Max Loss (per contract)
- -$115.00
- Breakeven(s)
- $23.15
- Risk / Reward Ratio
- 0.739
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% | -$115.00 |
| $5.15 | -77.9% | -$115.00 |
| $10.29 | -55.7% | -$115.00 |
| $15.43 | -33.6% | -$115.00 |
| $20.57 | -11.5% | -$115.00 |
| $25.71 | +10.6% | +$85.00 |
| $30.85 | +32.7% | +$85.00 |
| $35.99 | +54.8% | +$85.00 |
| $41.13 | +76.9% | +$85.00 |
| $46.27 | +99.0% | +$85.00 |
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 $21.94 on the downside to $24.56 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 4.95% 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 19.60%. 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 $23.25, 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 19.60%), the computed maximum profit is $85.00 per contract and the computed maximum loss is -$115.00 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 $23.15 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 5.62%; 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 19.60% with IV rank near 4.95%, 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.