How are VFMO 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 VFMO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.50%), the computed maximum profit is $1,217.50 per contract and the computed maximum loss is -$1,282.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a VFMO collar?

The breakeven for the VFMO collar priced on this page is roughly $227.83 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 VFMO market-implied 1-standard-deviation expected move is approximately 6.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current VFMO implied volatility affect this collar?

VFMO ATM IV is at 22.50% with IV rank near 28.63%, 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.

VFMO Collar Strategy

VFMO (Vanguard U.S. Momentum Factor ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.

Advisor uses a rules-based quantitative model to evaluate U.S. common stocks.Fund invests in stocks with strong recent performance.The portfolio includes a diverse mix of stocks representing many different market capitalizations (large, mid, and small), market sectors, and industry groups.Seeks long-term capital appreciation.Typically, at least 80% of the fund’s assets will be invested in securities issued by U.S. companies. Note: The Momentum factor is measured by total returns from month T-12 to month T-1, total returns from month T-7 to month T-1, and the intercept from a 1-year regression of stock returns on their regional benchmark.

VFMO (Vanguard U.S. Momentum Factor ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.38B, a beta of 1.38 versus the broader market, a 52-week range of 159.72-232.86, average daily share volume of 48K, a public-listing history dating back to 2018. These structural characteristics shape how VFMO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.38 indicates VFMO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. VFMO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a collar on VFMO?

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 VFMO snapshot

As of May 15, 2026, spot at $226.85, ATM IV 22.50%, IV rank 28.63%, expected move 6.45%. The collar on VFMO 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 VFMO specifically: IV regime affects collar pricing on both sides; compressed VFMO IV at 22.50% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 6.45% (roughly $14.63 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 VFMO expiries trade a higher absolute premium for lower per-day decay. Position sizing on VFMO should anchor to the underlying notional of $226.85 per share and to the trader's directional view on VFMO etf.

VFMO collar setup

The VFMO 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 VFMO near $226.85, the first option leg uses a $240.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VFMO 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 VFMO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$226.85	long
Sell 1	Call	$240.00	$3.45
Buy 1	Put	$215.00	$4.43

VFMO collar risk and reward

Net Premium / Debit: -$22,782.50
Max Profit (per contract): $1,217.50
Max Loss (per contract): -$1,282.50
Breakeven(s): $227.83
Risk / Reward Ratio: 0.949

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.

VFMO collar payoff curve

Modeled P&L at expiration across a range of underlying prices for the collar on VFMO. 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%	-$1,282.50
$50.17	-77.9%	-$1,282.50
$100.32	-55.8%	-$1,282.50
$150.48	-33.7%	-$1,282.50
$200.64	-11.6%	-$1,282.50
$250.79	+10.6%	+$1,217.50
$300.95	+32.7%	+$1,217.50
$351.11	+54.8%	+$1,217.50
$401.26	+76.9%	+$1,217.50
$451.42	+99.0%	+$1,217.50

When traders use collar on VFMO

Collars on VFMO hedge an existing long VFMO 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.

VFMO thesis for this collar

The market-implied 1-standard-deviation range for VFMO extends from approximately $212.22 on the downside to $241.48 on the upside. A VFMO collar hedges an existing long VFMO 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 VFMO IV rank near 28.63% 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 VFMO at 22.50%. As a Financial Services name, VFMO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VFMO-specific events.

VFMO 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. VFMO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VFMO alongside the broader basket even when VFMO-specific fundamentals are unchanged. Always rebuild the position from current VFMO chain quotes before placing a trade.

Frequently asked questions

What is a collar on VFMO?: A collar on VFMO is the collar strategy applied to VFMO (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 VFMO etf trading near $226.85, the strikes shown on this page are snapped to the nearest listed VFMO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are VFMO 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 VFMO collar priced from the end-of-day chain at a 30-day expiry (ATM IV 22.50%), the computed maximum profit is $1,217.50 per contract and the computed maximum loss is -$1,282.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a VFMO collar?: The breakeven for the VFMO collar priced on this page is roughly $227.83 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 VFMO market-implied 1-standard-deviation expected move is approximately 6.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a collar on VFMO?: Collars on VFMO hedge an existing long VFMO 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 VFMO implied volatility affect this collar?: VFMO ATM IV is at 22.50% with IV rank near 28.63%, 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.