USHY Collar Strategy
USHY (iShares Broad USD High Yield Corporate Bond ETF), in the Financial Services sector, (Asset Management - Bonds industry), listed on CBOE.
The iShares Broad USD High Yield Corporate Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds.
USHY (iShares Broad USD High Yield Corporate Bond ETF) trades in the Financial Services sector, specifically Asset Management - Bonds, with a market capitalization of approximately $26.21B, a beta of 0.64 versus the broader market, a 52-week range of 36.39-37.867, average daily share volume of 17.9M, a public-listing history dating back to 2017. These structural characteristics shape how USHY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.64 indicates USHY has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. USHY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on USHY?
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 USHY snapshot
As of May 15, 2026, spot at $36.80, ATM IV 14.60%, IV rank 2.25%, expected move 4.19%. The collar on USHY 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 63-day expiry.
Why this collar structure on USHY specifically: IV regime affects collar pricing on both sides; compressed USHY IV at 14.60% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 4.19% (roughly $1.54 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated USHY expiries trade a higher absolute premium for lower per-day decay. Position sizing on USHY should anchor to the underlying notional of $36.80 per share and to the trader's directional view on USHY etf.
USHY collar setup
The USHY 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 USHY near $36.80, the first option leg uses a $39.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed USHY chain at a 63-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 USHY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $36.80 | long |
| Sell 1 | Call | $39.00 | $0.14 |
| Buy 1 | Put | $35.00 | $0.30 |
USHY collar risk and reward
- Net Premium / Debit
- -$3,696.00
- Max Profit (per contract)
- $204.00
- Max Loss (per contract)
- -$196.00
- Breakeven(s)
- $36.96
- Risk / Reward Ratio
- 1.041
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.
USHY collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on USHY. 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% | -$196.00 |
| $8.15 | -77.9% | -$196.00 |
| $16.28 | -55.8% | -$196.00 |
| $24.42 | -33.7% | -$196.00 |
| $32.55 | -11.5% | -$196.00 |
| $40.69 | +10.6% | +$204.00 |
| $48.82 | +32.7% | +$204.00 |
| $56.96 | +54.8% | +$204.00 |
| $65.09 | +76.9% | +$204.00 |
| $73.23 | +99.0% | +$204.00 |
When traders use collar on USHY
Collars on USHY hedge an existing long USHY 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.
USHY thesis for this collar
The market-implied 1-standard-deviation range for USHY extends from approximately $35.26 on the downside to $38.34 on the upside. A USHY collar hedges an existing long USHY 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 USHY IV rank near 2.25% 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 USHY at 14.60%. As a Financial Services name, USHY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to USHY-specific events.
USHY 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. USHY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move USHY alongside the broader basket even when USHY-specific fundamentals are unchanged. Always rebuild the position from current USHY chain quotes before placing a trade.
Frequently asked questions
- What is a collar on USHY?
- A collar on USHY is the collar strategy applied to USHY (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 USHY etf trading near $36.80, the strikes shown on this page are snapped to the nearest listed USHY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are USHY 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 USHY collar priced from the end-of-day chain at a 30-day expiry (ATM IV 14.60%), the computed maximum profit is $204.00 per contract and the computed maximum loss is -$196.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a USHY collar?
- The breakeven for the USHY collar priced on this page is roughly $36.96 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 USHY market-implied 1-standard-deviation expected move is approximately 4.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on USHY?
- Collars on USHY hedge an existing long USHY 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 USHY implied volatility affect this collar?
- USHY ATM IV is at 14.60% with IV rank near 2.25%, 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.