WISE Collar Strategy
WISE (Themes Generative Artificial Intelligence ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The index is designed to provide exposure to companies that have business operations in AI related industries. The fund will invest, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities that comprise the index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the index. The fund is non-diversified.
WISE (Themes Generative Artificial Intelligence ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $31.3M, a beta of 1.70 versus the broader market, a 52-week range of 30-48.91, average daily share volume of 6K, a public-listing history dating back to 2023. These structural characteristics shape how WISE etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.70 indicates WISE has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. WISE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on WISE?
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 WISE snapshot
As of May 15, 2026, spot at $39.12, ATM IV 41.80%, IV rank 5.19%, expected move 11.98%. The collar on WISE 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 WISE specifically: IV regime affects collar pricing on both sides; compressed WISE IV at 41.80% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 11.98% (roughly $4.69 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 WISE expiries trade a higher absolute premium for lower per-day decay. Position sizing on WISE should anchor to the underlying notional of $39.12 per share and to the trader's directional view on WISE etf.
WISE collar setup
The WISE 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 WISE near $39.12, the first option leg uses a $41.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WISE 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 WISE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $39.12 | long |
| Sell 1 | Call | $41.00 | $0.78 |
| Buy 1 | Put | $37.00 | $1.28 |
WISE collar risk and reward
- Net Premium / Debit
- -$3,962.00
- Max Profit (per contract)
- $138.00
- Max Loss (per contract)
- -$262.00
- Breakeven(s)
- $39.62
- Risk / Reward Ratio
- 0.527
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.
WISE collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on WISE. 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% | -$262.00 |
| $8.66 | -77.9% | -$262.00 |
| $17.31 | -55.8% | -$262.00 |
| $25.96 | -33.7% | -$262.00 |
| $34.60 | -11.5% | -$262.00 |
| $43.25 | +10.6% | +$138.00 |
| $51.90 | +32.7% | +$138.00 |
| $60.55 | +54.8% | +$138.00 |
| $69.20 | +76.9% | +$138.00 |
| $77.85 | +99.0% | +$138.00 |
When traders use collar on WISE
Collars on WISE hedge an existing long WISE 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.
WISE thesis for this collar
The market-implied 1-standard-deviation range for WISE extends from approximately $34.43 on the downside to $43.81 on the upside. A WISE collar hedges an existing long WISE 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 WISE IV rank near 5.19% 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 WISE at 41.80%. As a Financial Services name, WISE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WISE-specific events.
WISE 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. WISE positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WISE alongside the broader basket even when WISE-specific fundamentals are unchanged. Always rebuild the position from current WISE chain quotes before placing a trade.
Frequently asked questions
- What is a collar on WISE?
- A collar on WISE is the collar strategy applied to WISE (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 WISE etf trading near $39.12, the strikes shown on this page are snapped to the nearest listed WISE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WISE 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 WISE collar priced from the end-of-day chain at a 30-day expiry (ATM IV 41.80%), the computed maximum profit is $138.00 per contract and the computed maximum loss is -$262.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WISE collar?
- The breakeven for the WISE collar priced on this page is roughly $39.62 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 WISE market-implied 1-standard-deviation expected move is approximately 11.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on WISE?
- Collars on WISE hedge an existing long WISE 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 WISE implied volatility affect this collar?
- WISE ATM IV is at 41.80% with IV rank near 5.19%, 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.