DGRS Butterfly Strategy
DGRS (WisdomTree U.S. SmallCap Quality Dividend Growth Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying U.S. common stocks with growth characteristics. Under normal circumstances, at least 80% of the fund's total assets (exclusive of collateral held from securities lending) will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. It is non-diversified.
DGRS (WisdomTree U.S. SmallCap Quality Dividend Growth Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $381.9M, a beta of 1.09 versus the broader market, a 52-week range of 44.38-57.24, average daily share volume of 29K, a public-listing history dating back to 2013. These structural characteristics shape how DGRS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.09 places DGRS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DGRS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on DGRS?
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 DGRS snapshot
As of May 15, 2026, spot at $54.64, ATM IV 22.40%, IV rank 2.54%, expected move 6.42%. The butterfly on DGRS 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 DGRS specifically: DGRS IV at 22.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a DGRS butterfly, with a market-implied 1-standard-deviation move of approximately 6.42% (roughly $3.51 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 DGRS expiries trade a higher absolute premium for lower per-day decay. Position sizing on DGRS should anchor to the underlying notional of $54.64 per share and to the trader's directional view on DGRS etf.
DGRS butterfly setup
The DGRS 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 DGRS near $54.64, the first option leg uses a $52.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DGRS 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 DGRS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $52.00 | $3.33 |
| Sell 2 | Call | $55.00 | $1.30 |
| Buy 1 | Call | $57.00 | $0.58 |
DGRS butterfly risk and reward
- Net Premium / Debit
- -$130.50
- Max Profit (per contract)
- $161.45
- Max Loss (per contract)
- -$130.50
- Breakeven(s)
- $53.31, $56.73
- Risk / Reward Ratio
- 1.237
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.
DGRS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DGRS. 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% | -$130.50 |
| $12.09 | -77.9% | -$130.50 |
| $24.17 | -55.8% | -$130.50 |
| $36.25 | -33.7% | -$130.50 |
| $48.33 | -11.5% | -$130.50 |
| $60.41 | +10.6% | -$30.50 |
| $72.49 | +32.7% | -$30.50 |
| $84.57 | +54.8% | -$30.50 |
| $96.65 | +76.9% | -$30.50 |
| $108.73 | +99.0% | -$30.50 |
When traders use butterfly on DGRS
Butterflies on DGRS are pinning bets - traders use them when they expect DGRS 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.
DGRS thesis for this butterfly
The market-implied 1-standard-deviation range for DGRS extends from approximately $51.13 on the downside to $58.15 on the upside. A DGRS long call butterfly is a pinning play: it pays maximum at the middle strike if DGRS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DGRS IV rank near 2.54% 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 DGRS at 22.40%. As a Financial Services name, DGRS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DGRS-specific events.
DGRS 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. DGRS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DGRS alongside the broader basket even when DGRS-specific fundamentals are unchanged. Always rebuild the position from current DGRS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DGRS?
- A butterfly on DGRS is the butterfly strategy applied to DGRS (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 DGRS etf trading near $54.64, the strikes shown on this page are snapped to the nearest listed DGRS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DGRS 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 DGRS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.40%), the computed maximum profit is $161.45 per contract and the computed maximum loss is -$130.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DGRS butterfly?
- The breakeven for the DGRS butterfly priced on this page is roughly $53.31 and $56.73 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 DGRS market-implied 1-standard-deviation expected move is approximately 6.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DGRS?
- Butterflies on DGRS are pinning bets - traders use them when they expect DGRS 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 DGRS implied volatility affect this butterfly?
- DGRS ATM IV is at 22.40% with IV rank near 2.54%, 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.