UMDD Collar Strategy
UMDD (ProShares - UltraPro MidCap 400), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The ProShares UltraPro MidCap400 strives to achieve daily investment outcomes that are triple (3x) the daily fluctuations of the S&P MidCap 400 index. This target is measured prior to accounting for any fees and operational expenses.
UMDD (ProShares - UltraPro MidCap 400) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $46.9M, a beta of 3.05 versus the broader market, a 52-week range of 21.52-38.45, average daily share volume of 8K, 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 3.05 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.
UMDD snapshot
As of August 14, 2026, spot at $39.11, ATM IV 46.00%, IV rank 6.08%, expected move 13.19%. The collar on UMDD below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this collar structure on UMDD specifically: IV regime affects collar pricing on both sides; compressed UMDD IV at 46.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 13.19% (roughly $5.16 on the underlying). The 35-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 $39.11 per share and to the trader's directional view on UMDD etf.
UMDD collar setup
The UMDD collar below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With UMDD at $39.11 on that close, the first option leg uses a $40.00 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 35-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 | $39.11 | long |
| Sell 1 | Call | $40.00 | $1.90 |
| Buy 1 | Put | $37.00 | $1.24 |
UMDD collar risk and reward
- Net Premium / Debit
- -$3,845.00
- Max Profit (per contract)
- $155.00
- Max Loss (per contract)
- -$145.00
- Breakeven(s)
- $38.45
- Risk / Reward Ratio
- 1.069
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% | -$145.00 |
| $8.66 | -77.9% | -$145.00 |
| $17.30 | -55.8% | -$145.00 |
| $25.95 | -33.7% | -$145.00 |
| $34.60 | -11.5% | -$145.00 |
| $43.24 | +10.6% | +$155.00 |
| $51.89 | +32.7% | +$155.00 |
| $60.53 | +54.8% | +$155.00 |
| $69.18 | +76.9% | +$155.00 |
| $77.83 | +99.0% | +$155.00 |
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 $33.95 on the downside to $44.27 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 6.08% 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 46.00%. 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 at $39.11 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed UMDD chain strike and the premiums come straight from that session's 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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 46.00%), the computed maximum profit is $155.00 per contract and the computed maximum loss is -$145.00 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 $38.45 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The UMDD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.19%; 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 46.00% with IV rank near 6.08%, 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.