FEMS Cash-Secured Put Strategy
FEMS (First Trust Emerging Markets Small Cap AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The First Trust Emerging Markets Small Cap 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 Emerging Markets Small Cap Index.
FEMS (First Trust Emerging Markets Small Cap AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $258.4M, a beta of 0.63 versus the broader market, a 52-week range of 38.53-49.49, average daily share volume of 33K, a public-listing history dating back to 2012. These structural characteristics shape how FEMS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.63 indicates FEMS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FEMS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a cash-secured put on FEMS?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
Current FEMS snapshot
As of May 15, 2026, spot at $50.57, ATM IV 31.10%, IV rank 17.79%, expected move 8.92%. The cash-secured put on FEMS 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 cash-secured put structure on FEMS specifically: FEMS IV at 31.10% is on the cheap side of its 1-year range, which means a premium-selling FEMS cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.92% (roughly $4.51 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 FEMS expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEMS should anchor to the underlying notional of $50.57 per share and to the trader's directional view on FEMS etf.
FEMS cash-secured put setup
The FEMS cash-secured put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FEMS near $50.57, the first option leg uses a $48.04 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEMS 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 FEMS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $48.04 | N/A |
FEMS cash-secured put risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
FEMS cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on FEMS. 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.
When traders use cash-secured put on FEMS
Cash-secured puts on FEMS earn premium while a trader waits to acquire FEMS etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning FEMS.
FEMS thesis for this cash-secured put
The market-implied 1-standard-deviation range for FEMS extends from approximately $46.06 on the downside to $55.08 on the upside. A FEMS cash-secured put lets a trader earn premium while waiting to acquire FEMS at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current FEMS IV rank near 17.79% 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 FEMS at 31.10%. As a Financial Services name, FEMS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEMS-specific events.
FEMS cash-secured put positions are structurally neutral to slightly bullish; 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. FEMS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FEMS alongside the broader basket even when FEMS-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on FEMS carry tail risk when realized volatility exceeds the implied move; review historical FEMS earnings reactions and macro stress periods before sizing. Always rebuild the position from current FEMS chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on FEMS?
- A cash-secured put on FEMS is the cash-secured put strategy applied to FEMS (etf). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. With FEMS etf trading near $50.57, the strikes shown on this page are snapped to the nearest listed FEMS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FEMS cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the FEMS cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 31.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FEMS cash-secured put?
- The breakeven for the FEMS cash-secured put priced on this page is no defined breakeven on the modeled curve 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 FEMS market-implied 1-standard-deviation expected move is approximately 8.92%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a cash-secured put on FEMS?
- Cash-secured puts on FEMS earn premium while a trader waits to acquire FEMS etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning FEMS.
- How does current FEMS implied volatility affect this cash-secured put?
- FEMS ATM IV is at 31.10% with IV rank near 17.79%, 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.