How are FEX 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 FEX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.70%), the computed maximum profit is $282.77 per contract and the computed maximum loss is -$369.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a FEX butterfly?

The breakeven for the FEX butterfly priced on this page is roughly $136.70 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 FEX market-implied 1-standard-deviation expected move is approximately 6.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current FEX implied volatility affect this butterfly?

FEX ATM IV is at 23.70% with IV rank near 33.30%, 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.

FEX Butterfly Strategy

FEX (First Trust Large Cap Core AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.

First Trust Exchange-Traded AlphaDEX Fund - First Trust Large Cap Core AlphaDEX Fund is an exchange traded fund launched and managed by First Trust Advisors LP. The fund invests in public equity markets of the United States. The fund invests in stocks of companies operating across diversified sectors. It invests in growth and value stocks of large-cap companies. The fund seeks to track the performance of the Nasdaq AlphaDEX Large Cap Core Index, by using full replication technique. First Trust Exchange-Traded AlphaDEX Fund - First Trust Large Cap Core AlphaDEX Fund was formed on May 8, 2007 and is domiciled in the United States.

FEX (First Trust Large Cap Core AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.56B, a beta of 0.94 versus the broader market, a 52-week range of 109.18-140.1, average daily share volume of 23K, a public-listing history dating back to 2007. These structural characteristics shape how FEX etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.94 places FEX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FEX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on FEX?

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 FEX snapshot

As of June 30, 2026, spot at $139.77, ATM IV 23.70%, IV rank 33.30%, expected move 6.79%. The butterfly on FEX 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 17-day expiry.

Why this butterfly structure on FEX specifically: FEX IV at 23.70% 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 6.79% (roughly $9.50 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FEX expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEX should anchor to the underlying notional of $139.77 per share and to the trader's directional view on FEX etf.

FEX butterfly setup

The FEX 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 FEX near $139.77, the first option leg uses a $133.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEX chain at a 17-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 FEX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$133.00	$7.43
Sell 2	Call	$140.00	$2.86
Buy 1	Call	$142.00	$1.99

FEX butterfly risk and reward

Net Premium / Debit: -$369.50
Max Profit (per contract): $282.77
Max Loss (per contract): -$369.50
Breakeven(s): $136.70
Risk / Reward Ratio: 0.765

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.

FEX butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on FEX. 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%	-$369.50
$30.91	-77.9%	-$369.50
$61.82	-55.8%	-$369.50
$92.72	-33.7%	-$369.50
$123.62	-11.6%	-$369.50
$154.52	+10.6%	+$130.50
$185.43	+32.7%	+$130.50
$216.33	+54.8%	+$130.50
$247.23	+76.9%	+$130.50
$278.14	+99.0%	+$130.50

When traders use butterfly on FEX

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

FEX thesis for this butterfly

The market-implied 1-standard-deviation range for FEX extends from approximately $130.27 on the downside to $149.27 on the upside. A FEX long call butterfly is a pinning play: it pays maximum at the middle strike if FEX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FEX IV rank near 33.30% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FEX should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FEX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEX-specific events.

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

Frequently asked questions

What is a butterfly on FEX?: A butterfly on FEX is the butterfly strategy applied to FEX (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 FEX etf trading near $139.77, the strikes shown on this page are snapped to the nearest listed FEX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are FEX 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 FEX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.70%), the computed maximum profit is $282.77 per contract and the computed maximum loss is -$369.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a FEX butterfly?: The breakeven for the FEX butterfly priced on this page is roughly $136.70 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 FEX market-implied 1-standard-deviation expected move is approximately 6.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on FEX?: Butterflies on FEX are pinning bets - traders use them when they expect FEX 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 FEX implied volatility affect this butterfly?: FEX ATM IV is at 23.70% with IV rank near 33.30%, 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.