UMDD Collar Strategy
UMDD (ProShares - UltraPro MidCap 400), in the Financial Services sector, (Asset Management industry), listed on AMEX.
ProShares UltraPro MidCap400 seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the S&P MidCap 400.
UMDD (ProShares - UltraPro MidCap 400) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $40.1M, a beta of 3.28 versus the broader market, a 52-week range of 19.43-35.19, average daily share volume of 13K, a public-listing history dating back to 2010. These structural characteristics shape how UMDD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.28 indicates UMDD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. UMDD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on UMDD?
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 UMDD snapshot
As of May 15, 2026, spot at $31.46, ATM IV 67.60%, IV rank 25.91%, expected move 19.38%. The collar on UMDD 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 UMDD specifically: IV regime affects collar pricing on both sides; compressed UMDD IV at 67.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 19.38% (roughly $6.10 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 UMDD expiries trade a higher absolute premium for lower per-day decay. Position sizing on UMDD should anchor to the underlying notional of $31.46 per share and to the trader's directional view on UMDD etf.
UMDD collar setup
The UMDD 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 UMDD near $31.46, the first option leg uses a $33.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UMDD 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 UMDD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $31.46 | long |
| Sell 1 | Call | $33.00 | $1.60 |
| Buy 1 | Put | $30.00 | $1.80 |
UMDD collar risk and reward
- Net Premium / Debit
- -$3,166.00
- Max Profit (per contract)
- $134.00
- Max Loss (per contract)
- -$166.00
- Breakeven(s)
- $31.66
- Risk / Reward Ratio
- 0.807
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.
UMDD collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on UMDD. 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% | -$166.00 |
| $6.96 | -77.9% | -$166.00 |
| $13.92 | -55.8% | -$166.00 |
| $20.87 | -33.6% | -$166.00 |
| $27.83 | -11.5% | -$166.00 |
| $34.78 | +10.6% | +$134.00 |
| $41.74 | +32.7% | +$134.00 |
| $48.69 | +54.8% | +$134.00 |
| $55.65 | +76.9% | +$134.00 |
| $62.60 | +99.0% | +$134.00 |
When traders use collar on UMDD
Collars on UMDD hedge an existing long UMDD 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.
UMDD thesis for this collar
The market-implied 1-standard-deviation range for UMDD extends from approximately $25.36 on the downside to $37.56 on the upside. A UMDD collar hedges an existing long UMDD 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 UMDD IV rank near 25.91% 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 UMDD at 67.60%. As a Financial Services name, UMDD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UMDD-specific events.
UMDD 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. UMDD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UMDD alongside the broader basket even when UMDD-specific fundamentals are unchanged. Always rebuild the position from current UMDD chain quotes before placing a trade.
Frequently asked questions
- What is a collar on UMDD?
- A collar on UMDD is the collar strategy applied to UMDD (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 UMDD etf trading near $31.46, the strikes shown on this page are snapped to the nearest listed UMDD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UMDD 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 UMDD collar priced from the end-of-day chain at a 30-day expiry (ATM IV 67.60%), the computed maximum profit is $134.00 per contract and the computed maximum loss is -$166.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UMDD collar?
- The breakeven for the UMDD collar priced on this page is roughly $31.66 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 UMDD market-implied 1-standard-deviation expected move is approximately 19.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on UMDD?
- Collars on UMDD hedge an existing long UMDD 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 UMDD implied volatility affect this collar?
- UMDD ATM IV is at 67.60% with IV rank near 25.91%, 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.