AAXJ Butterfly Strategy
AAXJ (iShares MSCI All Country Asia ex Japan ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The iShares MSCI All Country Asia ex Japan ETF seeks to track the investment results of an index composed of Asian equities, excluding Japan.
AAXJ (iShares MSCI All Country Asia ex Japan ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $4.79B, a beta of 1.01 versus the broader market, a 52-week range of 77.02-117.99, average daily share volume of 1.1M, a public-listing history dating back to 2008. These structural characteristics shape how AAXJ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.01 places AAXJ roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AAXJ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on AAXJ?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
Current AAXJ snapshot
As of May 15, 2026, spot at $113.00, ATM IV 28.60%, IV rank 31.19%, expected move 8.20%. The butterfly on AAXJ 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 butterfly structure on AAXJ specifically: AAXJ IV at 28.60% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 8.20% (roughly $9.27 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 AAXJ expiries trade a higher absolute premium for lower per-day decay. Position sizing on AAXJ should anchor to the underlying notional of $113.00 per share and to the trader's directional view on AAXJ etf.
AAXJ butterfly setup
The AAXJ butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With AAXJ near $113.00, the first option leg uses a $107.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AAXJ 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 AAXJ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $107.00 | $8.00 |
| Sell 2 | Call | $113.00 | $3.95 |
| Buy 1 | Call | $119.00 | $1.40 |
AAXJ butterfly risk and reward
- Net Premium / Debit
- -$150.00
- Max Profit (per contract)
- $393.72
- Max Loss (per contract)
- -$150.00
- Breakeven(s)
- $108.50, $117.50
- Risk / Reward Ratio
- 2.625
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
AAXJ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AAXJ. 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% | -$150.00 |
| $24.99 | -77.9% | -$150.00 |
| $49.98 | -55.8% | -$150.00 |
| $74.96 | -33.7% | -$150.00 |
| $99.95 | -11.6% | -$150.00 |
| $124.93 | +10.6% | -$150.00 |
| $149.91 | +32.7% | -$150.00 |
| $174.90 | +54.8% | -$150.00 |
| $199.88 | +76.9% | -$150.00 |
| $224.86 | +99.0% | -$150.00 |
When traders use butterfly on AAXJ
Butterflies on AAXJ are pinning bets - traders use them when they expect AAXJ to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
AAXJ thesis for this butterfly
The market-implied 1-standard-deviation range for AAXJ extends from approximately $103.73 on the downside to $122.27 on the upside. A AAXJ long call butterfly is a pinning play: it pays maximum at the middle strike if AAXJ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AAXJ IV rank near 31.19% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AAXJ should anchor more to the directional view and the expected-move geometry. As a Financial Services name, AAXJ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AAXJ-specific events.
AAXJ butterfly positions are structurally neutral / pin (limited-risk, limited-reward); 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. AAXJ positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AAXJ alongside the broader basket even when AAXJ-specific fundamentals are unchanged. Always rebuild the position from current AAXJ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AAXJ?
- A butterfly on AAXJ is the butterfly strategy applied to AAXJ (etf). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With AAXJ etf trading near $113.00, the strikes shown on this page are snapped to the nearest listed AAXJ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AAXJ butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the AAXJ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.60%), the computed maximum profit is $393.72 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AAXJ butterfly?
- The breakeven for the AAXJ butterfly priced on this page is roughly $108.50 and $117.50 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 AAXJ market-implied 1-standard-deviation expected move is approximately 8.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AAXJ?
- Butterflies on AAXJ are pinning bets - traders use them when they expect AAXJ to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current AAXJ implied volatility affect this butterfly?
- AAXJ ATM IV is at 28.60% with IV rank near 31.19%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.