AVEM Butterfly Strategy
AVEM (Avantis Emerging Markets Equity ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Invests in a broad set of companies of all market capitalizations across emerging market countries and is designed to increase expected returns* by overweighting securities believed to be trading at lower valuations with higher profitability ratios**.Pursues the benefits associated with indexing (diversification, low turnover, transparency of exposures), but with the ability to add value by making investment decisions using information in current prices. Efficient portfolio management and trading process that is designed to enhance returns and seeks to reduce unnecessary risks and costs. Built to fit seamlessly into an investor's asset allocation.
AVEM (Avantis Emerging Markets Equity ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $23.44B, a beta of 1.00 versus the broader market, a 52-week range of 63.91-96.075, average daily share volume of 2.1M, a public-listing history dating back to 2019. These structural characteristics shape how AVEM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.00 places AVEM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AVEM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on AVEM?
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 AVEM snapshot
As of May 15, 2026, spot at $91.96, ATM IV 26.80%, IV rank 3.95%, expected move 7.68%. The butterfly on AVEM 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 AVEM specifically: AVEM IV at 26.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a AVEM butterfly, with a market-implied 1-standard-deviation move of approximately 7.68% (roughly $7.07 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 AVEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on AVEM should anchor to the underlying notional of $91.96 per share and to the trader's directional view on AVEM etf.
AVEM butterfly setup
The AVEM 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 AVEM near $91.96, the first option leg uses a $87.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AVEM 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 AVEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $87.00 | $6.15 |
| Sell 2 | Call | $92.00 | $2.90 |
| Buy 1 | Call | $97.00 | $1.53 |
AVEM butterfly risk and reward
- Net Premium / Debit
- -$187.50
- Max Profit (per contract)
- $269.79
- Max Loss (per contract)
- -$187.50
- Breakeven(s)
- $88.88, $95.13
- Risk / Reward Ratio
- 1.439
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.
AVEM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AVEM. 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% | -$187.50 |
| $20.34 | -77.9% | -$187.50 |
| $40.67 | -55.8% | -$187.50 |
| $61.01 | -33.7% | -$187.50 |
| $81.34 | -11.6% | -$187.50 |
| $101.67 | +10.6% | -$187.50 |
| $122.00 | +32.7% | -$187.50 |
| $142.33 | +54.8% | -$187.50 |
| $162.66 | +76.9% | -$187.50 |
| $183.00 | +99.0% | -$187.50 |
When traders use butterfly on AVEM
Butterflies on AVEM are pinning bets - traders use them when they expect AVEM 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.
AVEM thesis for this butterfly
The market-implied 1-standard-deviation range for AVEM extends from approximately $84.89 on the downside to $99.03 on the upside. A AVEM long call butterfly is a pinning play: it pays maximum at the middle strike if AVEM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AVEM IV rank near 3.95% 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 AVEM at 26.80%. As a Financial Services name, AVEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AVEM-specific events.
AVEM 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. AVEM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AVEM alongside the broader basket even when AVEM-specific fundamentals are unchanged. Always rebuild the position from current AVEM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AVEM?
- A butterfly on AVEM is the butterfly strategy applied to AVEM (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 AVEM etf trading near $91.96, the strikes shown on this page are snapped to the nearest listed AVEM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AVEM 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 AVEM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.80%), the computed maximum profit is $269.79 per contract and the computed maximum loss is -$187.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AVEM butterfly?
- The breakeven for the AVEM butterfly priced on this page is roughly $88.88 and $95.13 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 AVEM market-implied 1-standard-deviation expected move is approximately 7.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AVEM?
- Butterflies on AVEM are pinning bets - traders use them when they expect AVEM 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 AVEM implied volatility affect this butterfly?
- AVEM ATM IV is at 26.80% with IV rank near 3.95%, 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.