DX Collar Strategy
DX (Dynex Capital, Inc.), in the Real Estate sector, (REIT - Mortgage industry), listed on NYSE.
Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders.
DX (Dynex Capital, Inc.) trades in the Real Estate sector, specifically REIT - Mortgage, with a market capitalization of approximately $2.00B, a trailing P/E of 10.92, a beta of 0.95 versus the broader market, a 52-week range of 11.7-14.93, average daily share volume of 5.9M, a public-listing history dating back to 1988, approximately 22 full-time employees. These structural characteristics shape how DX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.95 places DX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.92 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. DX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on DX?
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 DX snapshot
As of May 15, 2026, spot at $12.95, ATM IV 12.90%, IV rank 2.57%, expected move 3.70%. The collar on DX 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 DX specifically: IV regime affects collar pricing on both sides; compressed DX IV at 12.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 3.70% (roughly $0.48 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 DX expiries trade a higher absolute premium for lower per-day decay. Position sizing on DX should anchor to the underlying notional of $12.95 per share and to the trader's directional view on DX stock.
DX collar setup
The DX 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 DX near $12.95, the first option leg uses a $13.60 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DX 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 DX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $12.95 | long |
| Sell 1 | Call | $13.60 | N/A |
| Buy 1 | Put | $12.30 | N/A |
DX 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.
DX collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on DX. 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 DX
Collars on DX hedge an existing long DX stock 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.
DX thesis for this collar
The market-implied 1-standard-deviation range for DX extends from approximately $12.47 on the downside to $13.43 on the upside. A DX collar hedges an existing long DX 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 DX IV rank near 2.57% 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 DX at 12.90%. As a Real Estate name, DX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DX-specific events.
DX 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. DX positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DX alongside the broader basket even when DX-specific fundamentals are unchanged. Always rebuild the position from current DX chain quotes before placing a trade.
Frequently asked questions
- What is a collar on DX?
- A collar on DX is the collar strategy applied to DX (stock). 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 DX stock trading near $12.95, the strikes shown on this page are snapped to the nearest listed DX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DX 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 DX collar priced from the end-of-day chain at a 30-day expiry (ATM IV 12.90%), 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 DX collar?
- The breakeven for the DX 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 DX market-implied 1-standard-deviation expected move is approximately 3.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on DX?
- Collars on DX hedge an existing long DX stock 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 DX implied volatility affect this collar?
- DX ATM IV is at 12.90% with IV rank near 2.57%, 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.