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. The Fund invests not less than 80% of its total assets in equity securities of companies in the Utility Sector. It is an actively managed ETF and does not seek to replicate the performance of a specified passive index.
UTES (Virtus Reaves Utilities ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.18B, a beta of 0.75 versus the broader market, a 52-week range of 61.42-88.43, average daily share volume of 147K, 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 0.75 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.
UTES snapshot
As of September 30, 2026, spot at $70.16, ATM IV 34.40%, IV rank 5.01%, expected move 9.86%. The collar on UTES below is built from the September 30, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 16-day expiry.
Why this collar structure on UTES specifically: IV regime affects collar pricing on both sides; compressed UTES IV at 34.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 9.86% (roughly $6.92 on the underlying). The 16-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 $70.16 per share and to the trader's directional view on UTES etf.
UTES collar setup
The UTES collar below is built from the September 30, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With UTES at $70.16 on that close, the first option leg uses a $74.00 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 16-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 | $70.16 | long |
| Sell 1 | Call | $74.00 | $0.76 |
| Buy 1 | Put | $67.00 | $0.78 |
UTES collar risk and reward
- Net Premium / Debit
- -$7,018.00
- Max Profit (per contract)
- $382.00
- Max Loss (per contract)
- -$318.00
- Breakeven(s)
- $70.18
- Risk / Reward Ratio
- 1.201
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% | -$318.00 |
| $15.52 | -77.9% | -$318.00 |
| $31.03 | -55.8% | -$318.00 |
| $46.54 | -33.7% | -$318.00 |
| $62.06 | -11.5% | -$318.00 |
| $77.57 | +10.6% | +$382.00 |
| $93.08 | +32.7% | +$382.00 |
| $108.59 | +54.8% | +$382.00 |
| $124.10 | +76.9% | +$382.00 |
| $139.61 | +99.0% | +$382.00 |
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 $63.24 on the downside to $77.08 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 5.01% 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 34.40%. 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 at $70.16 on the September 30, 2026 close, the strikes shown on this page are snapped to the nearest listed UTES chain strike and the premiums come straight from that session's 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 September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.40%), the computed maximum profit is $382.00 per contract and the computed maximum loss is -$318.00 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 $70.18 at expiration, derived from the September 30, 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 UTES market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.86%; 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 34.40% with IV rank near 5.01%, 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.