UCO Collar Strategy
UCO (ProShares - Ultra Bloomberg Crude Oil), in the Financial Services sector, (Asset Management industry), listed on AMEX.
ProShares Ultra Bloomberg Crude OilSM seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Bloomberg Commodity Balanced WTI Crude Oil Index.
UCO (ProShares - Ultra Bloomberg Crude Oil) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $434.1M, a beta of 2.82 versus the broader market, a 52-week range of 18.12-51.06, average daily share volume of 10.6M, a public-listing history dating back to 2008. These structural characteristics shape how UCO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.82 indicates UCO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a collar on UCO?
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 UCO snapshot
As of May 15, 2026, spot at $50.09, ATM IV 94.80%, IV rank 38.92%, expected move 27.18%. The collar on UCO 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 UCO specifically: IV regime affects collar pricing on both sides; mid-range UCO IV at 94.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 27.18% (roughly $13.61 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 UCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on UCO should anchor to the underlying notional of $50.09 per share and to the trader's directional view on UCO etf.
UCO collar setup
The UCO 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 UCO near $50.09, the first option leg uses a $51.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UCO 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 UCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $50.09 | long |
| Sell 1 | Call | $51.00 | $5.45 |
| Buy 1 | Put | $48.00 | $4.55 |
UCO collar risk and reward
- Net Premium / Debit
- -$4,919.00
- Max Profit (per contract)
- $181.00
- Max Loss (per contract)
- -$119.00
- Breakeven(s)
- $49.19
- Risk / Reward Ratio
- 1.521
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.
UCO collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on UCO. 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% | -$119.00 |
| $11.08 | -77.9% | -$119.00 |
| $22.16 | -55.8% | -$119.00 |
| $33.23 | -33.7% | -$119.00 |
| $44.31 | -11.5% | -$119.00 |
| $55.38 | +10.6% | +$181.00 |
| $66.45 | +32.7% | +$181.00 |
| $77.53 | +54.8% | +$181.00 |
| $88.60 | +76.9% | +$181.00 |
| $99.68 | +99.0% | +$181.00 |
When traders use collar on UCO
Collars on UCO hedge an existing long UCO 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.
UCO thesis for this collar
The market-implied 1-standard-deviation range for UCO extends from approximately $36.48 on the downside to $63.70 on the upside. A UCO collar hedges an existing long UCO 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 UCO IV rank near 38.92% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on UCO should anchor more to the directional view and the expected-move geometry. As a Financial Services name, UCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UCO-specific events.
UCO 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. UCO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UCO alongside the broader basket even when UCO-specific fundamentals are unchanged. Always rebuild the position from current UCO chain quotes before placing a trade.
Frequently asked questions
- What is a collar on UCO?
- A collar on UCO is the collar strategy applied to UCO (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 UCO etf trading near $50.09, the strikes shown on this page are snapped to the nearest listed UCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UCO 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 UCO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 94.80%), the computed maximum profit is $181.00 per contract and the computed maximum loss is -$119.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UCO collar?
- The breakeven for the UCO collar priced on this page is roughly $49.19 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 UCO market-implied 1-standard-deviation expected move is approximately 27.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on UCO?
- Collars on UCO hedge an existing long UCO 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 UCO implied volatility affect this collar?
- UCO ATM IV is at 94.80% with IV rank near 38.92%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.