FDT Butterfly Strategy
FDT (First Trust Developed Markets ex-US AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The First Trust Developed Markets ex-US AlphaDEX Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an equity index called the Nasdaq AlphaDEX Developed Markets Ex-US Index.
FDT (First Trust Developed Markets ex-US AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $966.8M, a beta of 1.09 versus the broader market, a 52-week range of 62.87-100.71, average daily share volume of 140K, a public-listing history dating back to 2011. These structural characteristics shape how FDT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.09 places FDT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FDT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FDT?
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 FDT snapshot
As of May 15, 2026, spot at $96.72, ATM IV 20.70%, IV rank 36.58%, expected move 5.93%. The butterfly on FDT 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 FDT specifically: FDT IV at 20.70% 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 5.93% (roughly $5.74 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 FDT expiries trade a higher absolute premium for lower per-day decay. Position sizing on FDT should anchor to the underlying notional of $96.72 per share and to the trader's directional view on FDT etf.
FDT butterfly setup
The FDT 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 FDT near $96.72, the first option leg uses a $92.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FDT 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 FDT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $92.00 | $6.05 |
| Sell 2 | Call | $97.00 | $2.38 |
| Buy 1 | Call | $102.00 | $0.58 |
FDT butterfly risk and reward
- Net Premium / Debit
- -$188.00
- Max Profit (per contract)
- $290.90
- Max Loss (per contract)
- -$188.00
- Breakeven(s)
- $93.88, $100.12
- Risk / Reward Ratio
- 1.547
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.
FDT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FDT. 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% | -$188.00 |
| $21.39 | -77.9% | -$188.00 |
| $42.78 | -55.8% | -$188.00 |
| $64.16 | -33.7% | -$188.00 |
| $85.55 | -11.6% | -$188.00 |
| $106.93 | +10.6% | -$188.00 |
| $128.32 | +32.7% | -$188.00 |
| $149.70 | +54.8% | -$188.00 |
| $171.08 | +76.9% | -$188.00 |
| $192.47 | +99.0% | -$188.00 |
When traders use butterfly on FDT
Butterflies on FDT are pinning bets - traders use them when they expect FDT 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.
FDT thesis for this butterfly
The market-implied 1-standard-deviation range for FDT extends from approximately $90.98 on the downside to $102.46 on the upside. A FDT long call butterfly is a pinning play: it pays maximum at the middle strike if FDT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FDT IV rank near 36.58% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FDT should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FDT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FDT-specific events.
FDT 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. FDT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FDT alongside the broader basket even when FDT-specific fundamentals are unchanged. Always rebuild the position from current FDT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FDT?
- A butterfly on FDT is the butterfly strategy applied to FDT (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 FDT etf trading near $96.72, the strikes shown on this page are snapped to the nearest listed FDT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FDT 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 FDT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 20.70%), the computed maximum profit is $290.90 per contract and the computed maximum loss is -$188.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FDT butterfly?
- The breakeven for the FDT butterfly priced on this page is roughly $93.88 and $100.12 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 FDT market-implied 1-standard-deviation expected move is approximately 5.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FDT?
- Butterflies on FDT are pinning bets - traders use them when they expect FDT 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 FDT implied volatility affect this butterfly?
- FDT ATM IV is at 20.70% with IV rank near 36.58%, 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.