UTES Collar Strategy
UTES (Virtus Reaves Utilities ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Fund seeks to provide total return through a combination of capital appreciation and income, primarily through investments in equity securities of companies in the utility sector.
UTES (Virtus Reaves Utilities ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.07B, a beta of 0.84 versus the broader market, a 52-week range of 69.802-88.429, average daily share volume of 164K, a public-listing history dating back to 2015. These structural characteristics shape how UTES etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.84 places UTES roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. UTES pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on UTES?
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 UTES snapshot
As of May 15, 2026, spot at $77.41, ATM IV 25.70%, IV rank 13.54%, expected move 7.37%. The collar on UTES 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 UTES specifically: IV regime affects collar pricing on both sides; compressed UTES IV at 25.70% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 7.37% (roughly $5.70 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 UTES expiries trade a higher absolute premium for lower per-day decay. Position sizing on UTES should anchor to the underlying notional of $77.41 per share and to the trader's directional view on UTES etf.
UTES collar setup
The UTES 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 UTES near $77.41, the first option leg uses a $81.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UTES 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 UTES shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $77.41 | long |
| Sell 1 | Call | $81.00 | $1.19 |
| Buy 1 | Put | $75.00 | $1.30 |
UTES collar risk and reward
- Net Premium / Debit
- -$7,752.00
- Max Profit (per contract)
- $348.00
- Max Loss (per contract)
- -$252.00
- Breakeven(s)
- $77.52
- Risk / Reward Ratio
- 1.381
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.
UTES collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on UTES. 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% | -$252.00 |
| $17.12 | -77.9% | -$252.00 |
| $34.24 | -55.8% | -$252.00 |
| $51.35 | -33.7% | -$252.00 |
| $68.47 | -11.6% | -$252.00 |
| $85.58 | +10.6% | +$348.00 |
| $102.70 | +32.7% | +$348.00 |
| $119.81 | +54.8% | +$348.00 |
| $136.93 | +76.9% | +$348.00 |
| $154.04 | +99.0% | +$348.00 |
When traders use collar on UTES
Collars on UTES hedge an existing long UTES 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.
UTES thesis for this collar
The market-implied 1-standard-deviation range for UTES extends from approximately $71.71 on the downside to $83.11 on the upside. A UTES collar hedges an existing long UTES 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 UTES IV rank near 13.54% 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 UTES at 25.70%. As a Financial Services name, UTES options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UTES-specific events.
UTES 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. UTES positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UTES alongside the broader basket even when UTES-specific fundamentals are unchanged. Always rebuild the position from current UTES chain quotes before placing a trade.
Frequently asked questions
- What is a collar on UTES?
- A collar on UTES is the collar strategy applied to UTES (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 UTES etf trading near $77.41, the strikes shown on this page are snapped to the nearest listed UTES chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UTES 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 UTES collar priced from the end-of-day chain at a 30-day expiry (ATM IV 25.70%), the computed maximum profit is $348.00 per contract and the computed maximum loss is -$252.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UTES collar?
- The breakeven for the UTES collar priced on this page is roughly $77.52 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 UTES market-implied 1-standard-deviation expected move is approximately 7.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on UTES?
- Collars on UTES hedge an existing long UTES 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 UTES implied volatility affect this collar?
- UTES ATM IV is at 25.70% with IV rank near 13.54%, 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.