EART Collar Strategy
EART (Global X Rare Earth & Critical Materials ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
This ETF aims to mirror the performance of an index comprising global companies that produce metals and other raw materials deemed crucial for the advancement of groundbreaking technologies. To qualify, companies must typically generate at least 50% of their income from activities like exploring, extracting, manufacturing, or refining materials across ten distinct categories, including rare earth elements, lithium, copper, and carbon fiber. However, companies that are not yet revenue-generating may still be eligible if classified as Pre-Revenue Disruptive Materials Companies. For firms primarily involved with lithium, those deriving between 25% and 50% of their revenue from this material can also be included as Diversified Lithium Companies. A sophisticated natural language processing algorithm is utilized to identify and rank suitable equities. From each material category, the five highest-ranked companies—covering both established disruptive material producers and pre-revenue entities—are chosen.
EART (Global X Rare Earth & Critical Materials ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $46.3M, a beta of 1.21 versus the broader market, a 52-week range of 16.45-36.92, average daily share volume of 19K, a public-listing history dating back to 2022. These structural characteristics shape how EART stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.21 places EART roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. EART pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a collar on EART?
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 EART snapshot
As of June 30, 2026, spot at $29.19, ATM IV 26.50%, expected move 7.60%. The collar on EART 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 17-day expiry.
Why this collar structure on EART specifically: IV rank is unavailable in the current snapshot, so regime-based timing for EART is inferred from ATM IV at 26.50% alone, with a market-implied 1-standard-deviation move of approximately 7.60% (roughly $2.22 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated EART expiries trade a higher absolute premium for lower per-day decay. Position sizing on EART should anchor to the underlying notional of $29.19 per share and to the trader's directional view on EART stock.
EART collar setup
The EART 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 EART near $29.19, the first option leg uses a $31.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EART chain at a 17-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 EART shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $29.19 | long |
| Sell 1 | Call | $31.00 | $0.46 |
| Buy 1 | Put | $28.00 | $0.74 |
EART collar risk and reward
- Net Premium / Debit
- -$2,947.00
- Max Profit (per contract)
- $153.00
- Max Loss (per contract)
- -$147.00
- Breakeven(s)
- $29.47
- Risk / Reward Ratio
- 1.041
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.
EART collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on EART. 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% | -$147.00 |
| $6.46 | -77.9% | -$147.00 |
| $12.92 | -55.8% | -$147.00 |
| $19.37 | -33.6% | -$147.00 |
| $25.82 | -11.5% | -$147.00 |
| $32.27 | +10.6% | +$153.00 |
| $38.73 | +32.7% | +$153.00 |
| $45.18 | +54.8% | +$153.00 |
| $51.63 | +76.9% | +$153.00 |
| $58.09 | +99.0% | +$153.00 |
When traders use collar on EART
Collars on EART hedge an existing long EART 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.
EART thesis for this collar
The market-implied 1-standard-deviation range for EART extends from approximately $26.97 on the downside to $31.41 on the upside. A EART collar hedges an existing long EART 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. As a Financial Services name, EART options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EART-specific events.
EART 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. EART positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EART alongside the broader basket even when EART-specific fundamentals are unchanged. Always rebuild the position from current EART chain quotes before placing a trade.
Frequently asked questions
- What is a collar on EART?
- A collar on EART is the collar strategy applied to EART (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 EART stock trading near $29.19, the strikes shown on this page are snapped to the nearest listed EART chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EART 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 EART collar priced from the end-of-day chain at a 30-day expiry (ATM IV 26.50%), the computed maximum profit is $153.00 per contract and the computed maximum loss is -$147.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EART collar?
- The breakeven for the EART collar priced on this page is roughly $29.47 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 EART market-implied 1-standard-deviation expected move is approximately 7.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on EART?
- Collars on EART hedge an existing long EART 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 EART implied volatility affect this collar?
- Current EART ATM IV is 26.50%; IV rank context is unavailable in the current snapshot.