DHS Butterfly Strategy
DHS (WisdomTree U.S. High Dividend Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Under normal circumstances, at least 95% 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. The index is a fundamentally weighted index that is comprised of companies with the highest dividend yields selected from the WisdomTree U.S. Dividend Index. The fund is non-diversified.
DHS (WisdomTree U.S. High Dividend Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.48B, a beta of 0.53 versus the broader market, a 52-week range of 92.82-114.22, average daily share volume of 33K, a public-listing history dating back to 2006. These structural characteristics shape how DHS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.53 indicates DHS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DHS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on DHS?
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 DHS snapshot
As of May 15, 2026, spot at $110.59, ATM IV 6.00%, IV rank 0.00%, expected move 1.72%. The butterfly on DHS 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 DHS specifically: DHS IV at 6.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a DHS butterfly, with a market-implied 1-standard-deviation move of approximately 1.72% (roughly $1.90 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 DHS expiries trade a higher absolute premium for lower per-day decay. Position sizing on DHS should anchor to the underlying notional of $110.59 per share and to the trader's directional view on DHS etf.
DHS butterfly setup
The DHS 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 DHS near $110.59, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DHS 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 DHS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $105.00 | $5.85 |
| Sell 2 | Call | $111.00 | $1.61 |
| Buy 1 | Call | $116.00 | $0.21 |
DHS butterfly risk and reward
- Net Premium / Debit
- -$284.00
- Max Profit (per contract)
- $300.93
- Max Loss (per contract)
- -$284.00
- Breakeven(s)
- $107.84, $114.16
- Risk / Reward Ratio
- 1.060
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.
DHS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DHS. 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% | -$284.00 |
| $24.46 | -77.9% | -$284.00 |
| $48.91 | -55.8% | -$284.00 |
| $73.36 | -33.7% | -$284.00 |
| $97.81 | -11.6% | -$284.00 |
| $122.26 | +10.6% | -$184.00 |
| $146.72 | +32.7% | -$184.00 |
| $171.17 | +54.8% | -$184.00 |
| $195.62 | +76.9% | -$184.00 |
| $220.07 | +99.0% | -$184.00 |
When traders use butterfly on DHS
Butterflies on DHS are pinning bets - traders use them when they expect DHS 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.
DHS thesis for this butterfly
The market-implied 1-standard-deviation range for DHS extends from approximately $108.69 on the downside to $112.49 on the upside. A DHS long call butterfly is a pinning play: it pays maximum at the middle strike if DHS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DHS IV rank near 0.00% 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 DHS at 6.00%. As a Financial Services name, DHS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DHS-specific events.
DHS 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. DHS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DHS alongside the broader basket even when DHS-specific fundamentals are unchanged. Always rebuild the position from current DHS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DHS?
- A butterfly on DHS is the butterfly strategy applied to DHS (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 DHS etf trading near $110.59, the strikes shown on this page are snapped to the nearest listed DHS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DHS 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 DHS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 6.00%), the computed maximum profit is $300.93 per contract and the computed maximum loss is -$284.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DHS butterfly?
- The breakeven for the DHS butterfly priced on this page is roughly $107.84 and $114.16 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 DHS market-implied 1-standard-deviation expected move is approximately 1.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DHS?
- Butterflies on DHS are pinning bets - traders use them when they expect DHS 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 DHS implied volatility affect this butterfly?
- DHS ATM IV is at 6.00% with IV rank near 0.00%, 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.