How are FEPI 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 FEPI butterfly priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 26.90%), the computed maximum profit is $101.82 per contract and the computed maximum loss is -$98.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a FEPI butterfly?

The breakeven for the FEPI butterfly priced on this page is roughly $35.98 and $38.02 at expiration, derived from the November 13, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FEPI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current FEPI implied volatility affect this butterfly?

FEPI ATM IV is at 26.90% with IV rank near 42.86%, 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.

FEPI Butterfly Strategy

FEPI (REX FANG & Innovation Equity Premium Income ETF), in the Financial Services sector, (Asset Management - Income industry), listed on NASDAQ.

The REX FANG & Innovation Equity Premium Income ETF, or FEPI, utilizes a covered call strategy designed to achieve two main goals: generating income and providing exposure to potential growth within the technology sector. The fund accomplishes this by maintaining positions in the stocks comprising its benchmark, the Solactive FANG Innovation Index, and simultaneously selling call options on these shares that are slightly out-of-the-money. This approach leverages the significant volatility often found in major technology companies, thereby earning premium income from the options. However, it also means that some of the potential upside from stock appreciation is capped. An additional benefit is a modest safeguard against drops in stock prices. It's important to recognize, though, that this protective buffer is confined to the option premiums received and may not completely negate substantial declines in the underlying securities.

FEPI (REX FANG & Innovation Equity Premium Income ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $645.8M, a beta of 1.13 versus the broader market, a 52-week range of 35.06-46.89, average daily share volume of 213K, a public-listing history dating back to 2023. These structural characteristics shape how FEPI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.13 places FEPI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FEPI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on FEPI?

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.

FEPI snapshot

As of November 13, 2026, spot at $37.18, ATM IV 26.90%, IV rank 42.86%, expected move 7.71%. The butterfly on FEPI below is built from the November 13, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this butterfly structure on FEPI specifically: FEPI IV at 26.90% 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 7.71% (roughly $2.87 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FEPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEPI should anchor to the underlying notional of $37.18 per share and to the trader's directional view on FEPI etf.

FEPI butterfly setup

The FEPI butterfly below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FEPI at $37.18 on that close, the first option leg uses a $35.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEPI chain at a 35-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 FEPI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$35.00	$2.35
Sell 2	Call	$37.00	$0.88
Buy 1	Call	$39.00	$0.38

FEPI butterfly risk and reward

Net Premium / Debit: -$98.00
Max Profit (per contract): $101.82
Max Loss (per contract): -$98.00
Breakeven(s): $35.98, $38.02
Risk / Reward Ratio: 1.039

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.

FEPI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on FEPI. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$98.00
$8.23	-77.9%	-$98.00
$16.45	-55.8%	-$98.00
$24.67	-33.7%	-$98.00
$32.89	-11.5%	-$98.00
$41.11	+10.6%	-$98.00
$49.33	+32.7%	-$98.00
$57.55	+54.8%	-$98.00
$65.77	+76.9%	-$98.00
$73.99	+99.0%	-$98.00

When traders use butterfly on FEPI

Butterflies on FEPI are pinning bets - traders use them when they expect FEPI 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.

FEPI thesis for this butterfly

The market-implied 1-standard-deviation range for FEPI extends from approximately $34.31 on the downside to $40.05 on the upside. A FEPI long call butterfly is a pinning play: it pays maximum at the middle strike if FEPI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FEPI IV rank near 42.86% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FEPI should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FEPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEPI-specific events.

FEPI 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. FEPI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FEPI alongside the broader basket even when FEPI-specific fundamentals are unchanged. Always rebuild the position from current FEPI chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on FEPI?: A butterfly on FEPI is the butterfly strategy applied to FEPI (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 FEPI etf at $37.18 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed FEPI chain strike and the premiums come straight from that session's bid/ask midpoint.
How are FEPI 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 FEPI butterfly priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 26.90%), the computed maximum profit is $101.82 per contract and the computed maximum loss is -$98.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a FEPI butterfly?: The breakeven for the FEPI butterfly priced on this page is roughly $35.98 and $38.02 at expiration, derived from the November 13, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FEPI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on FEPI?: Butterflies on FEPI are pinning bets - traders use them when they expect FEPI 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 FEPI implied volatility affect this butterfly?: FEPI ATM IV is at 26.90% with IV rank near 42.86%, 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.