ERTH Butterfly Strategy
ERTH (Invesco MSCI Sustainable Future ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Invesco MSCI Sustainable Future ETF (Fund) is based on the MSCI Global Environment Select Index (Index). The Fund will generally invest at least 90% of its total assets in securities that comprise the Index. The Index is comprised of companies that focus on offering products or services that contribute to a more environmentally sustainable economy by making a more efficient use of global resources. The Index is designed to maximize exposure to six Environmental Impact Themes: alternative energy, energy efficiency, green building, sustainable water, pollution prevention and control, and sustainable agriculture. The Fund and the Index are rebalanced quarterly.
ERTH (Invesco MSCI Sustainable Future ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $148.3M, a beta of 1.10 versus the broader market, a 52-week range of 41.3-51.08, average daily share volume of 3K, a public-listing history dating back to 2006. These structural characteristics shape how ERTH etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places ERTH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ERTH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ERTH?
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 ERTH snapshot
As of May 15, 2026, spot at $49.98, ATM IV 26.70%, IV rank 25.44%, expected move 7.65%. The butterfly on ERTH 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 ERTH specifically: ERTH IV at 26.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a ERTH butterfly, with a market-implied 1-standard-deviation move of approximately 7.65% (roughly $3.83 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 ERTH expiries trade a higher absolute premium for lower per-day decay. Position sizing on ERTH should anchor to the underlying notional of $49.98 per share and to the trader's directional view on ERTH etf.
ERTH butterfly setup
The ERTH 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 ERTH near $49.98, the first option leg uses a $47.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ERTH 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 ERTH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $47.00 | $3.53 |
| Sell 2 | Call | $50.00 | $1.52 |
| Buy 1 | Call | $52.00 | $0.72 |
ERTH butterfly risk and reward
- Net Premium / Debit
- -$120.50
- Max Profit (per contract)
- $155.89
- Max Loss (per contract)
- -$120.50
- Breakeven(s)
- $48.21, $51.84
- Risk / Reward Ratio
- 1.294
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.
ERTH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ERTH. 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% | -$120.50 |
| $11.06 | -77.9% | -$120.50 |
| $22.11 | -55.8% | -$120.50 |
| $33.16 | -33.7% | -$120.50 |
| $44.21 | -11.5% | -$120.50 |
| $55.26 | +10.6% | -$20.50 |
| $66.31 | +32.7% | -$20.50 |
| $77.36 | +54.8% | -$20.50 |
| $88.41 | +76.9% | -$20.50 |
| $99.46 | +99.0% | -$20.50 |
When traders use butterfly on ERTH
Butterflies on ERTH are pinning bets - traders use them when they expect ERTH 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.
ERTH thesis for this butterfly
The market-implied 1-standard-deviation range for ERTH extends from approximately $46.15 on the downside to $53.81 on the upside. A ERTH long call butterfly is a pinning play: it pays maximum at the middle strike if ERTH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ERTH IV rank near 25.44% 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 ERTH at 26.70%. As a Financial Services name, ERTH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ERTH-specific events.
ERTH 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. ERTH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ERTH alongside the broader basket even when ERTH-specific fundamentals are unchanged. Always rebuild the position from current ERTH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ERTH?
- A butterfly on ERTH is the butterfly strategy applied to ERTH (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 ERTH etf trading near $49.98, the strikes shown on this page are snapped to the nearest listed ERTH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ERTH 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 ERTH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.70%), the computed maximum profit is $155.89 per contract and the computed maximum loss is -$120.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ERTH butterfly?
- The breakeven for the ERTH butterfly priced on this page is roughly $48.21 and $51.84 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 ERTH market-implied 1-standard-deviation expected move is approximately 7.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ERTH?
- Butterflies on ERTH are pinning bets - traders use them when they expect ERTH 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 ERTH implied volatility affect this butterfly?
- ERTH ATM IV is at 26.70% with IV rank near 25.44%, 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.