TYO Collar Strategy
TYO (Direxion Daily 7-10 Year Treasury Bear 3X ETF), in the Financial Services sector, (Asset Management 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.
TYO (Direxion Daily 7-10 Year Treasury Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $9.7M, a beta of -3.52 versus the broader market, a 52-week range of 12.62-14.62, average daily share volume of 23K, a public-listing history dating back to 2009. These structural characteristics shape how TYO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -3.52 indicates TYO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TYO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on TYO?
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 TYO snapshot
As of May 15, 2026, spot at $14.45, ATM IV 20.10%, IV rank 8.16%, expected move 5.76%. The collar on TYO 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 TYO specifically: IV regime affects collar pricing on both sides; compressed TYO 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 $0.83 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 TYO expiries trade a higher absolute premium for lower per-day decay. Position sizing on TYO should anchor to the underlying notional of $14.45 per share and to the trader's directional view on TYO etf.
TYO collar setup
The TYO 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 TYO near $14.45, the first option leg uses a $15.17 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TYO 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 TYO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $14.45 | long |
| Sell 1 | Call | $15.17 | N/A |
| Buy 1 | Put | $13.73 | N/A |
TYO collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
TYO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on TYO. 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.
When traders use collar on TYO
Collars on TYO hedge an existing long TYO 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.
TYO thesis for this collar
The market-implied 1-standard-deviation range for TYO extends from approximately $13.62 on the downside to $15.28 on the upside. A TYO collar hedges an existing long TYO 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 TYO IV rank near 8.16% 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 TYO at 20.10%. As a Financial Services name, TYO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TYO-specific events.
TYO 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. TYO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TYO alongside the broader basket even when TYO-specific fundamentals are unchanged. Always rebuild the position from current TYO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on TYO?
- A collar on TYO is the collar strategy applied to TYO (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 TYO etf trading near $14.45, the strikes shown on this page are snapped to the nearest listed TYO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TYO 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 TYO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 20.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TYO collar?
- The breakeven for the TYO collar priced on this page is no defined breakeven on the modeled curve 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 TYO market-implied 1-standard-deviation expected move 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 TYO?
- Collars on TYO hedge an existing long TYO 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 TYO implied volatility affect this collar?
- TYO ATM IV is at 20.10% with IV rank near 8.16%, 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.