USMF Collar Strategy
USMF (WisdomTree U.S. Multifactor Fund), in the Financial Services sector, (Asset Management industry), listed on CBOE.
Under normal circumstances, at least 80% of the fund's total assets will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is generally comprised of 200 U.S. companies with the highest composite scores based on two fundamental factors (value and quality measures) and two technical factors (momentum and correlation). The fund is non-diversified.
USMF (WisdomTree U.S. Multifactor Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $356.1M, a beta of 0.72 versus the broader market, a 52-week range of 48.405-52.72, average daily share volume of 22K, a public-listing history dating back to 2017. These structural characteristics shape how USMF etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.72 places USMF roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. USMF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on USMF?
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 USMF snapshot
As of May 15, 2026, spot at $53.63, ATM IV 28.00%, IV rank 39.08%, expected move 8.03%. The collar on USMF 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 USMF specifically: IV regime affects collar pricing on both sides; mid-range USMF IV at 28.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $4.31 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 USMF expiries trade a higher absolute premium for lower per-day decay. Position sizing on USMF should anchor to the underlying notional of $53.63 per share and to the trader's directional view on USMF etf.
USMF collar setup
The USMF 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 USMF near $53.63, the first option leg uses a $56.31 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed USMF 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 USMF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $53.63 | long |
| Sell 1 | Call | $56.31 | N/A |
| Buy 1 | Put | $50.95 | N/A |
USMF 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.
USMF collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on USMF. 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 USMF
Collars on USMF hedge an existing long USMF 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.
USMF thesis for this collar
The market-implied 1-standard-deviation range for USMF extends from approximately $49.32 on the downside to $57.94 on the upside. A USMF collar hedges an existing long USMF 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 USMF IV rank near 39.08% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on USMF should anchor more to the directional view and the expected-move geometry. As a Financial Services name, USMF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to USMF-specific events.
USMF 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. USMF positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move USMF alongside the broader basket even when USMF-specific fundamentals are unchanged. Always rebuild the position from current USMF chain quotes before placing a trade.
Frequently asked questions
- What is a collar on USMF?
- A collar on USMF is the collar strategy applied to USMF (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 USMF etf trading near $53.63, the strikes shown on this page are snapped to the nearest listed USMF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are USMF 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 USMF collar priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), 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 USMF collar?
- The breakeven for the USMF 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 USMF market-implied 1-standard-deviation expected move is approximately 8.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on USMF?
- Collars on USMF hedge an existing long USMF 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 USMF implied volatility affect this collar?
- USMF ATM IV is at 28.00% with IV rank near 39.08%, 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.