FGM Bear Put Spread Strategy
FGM (First Trust Germany AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The First Trust Germany AlphaDEX Fund is an exchange-traded fund (ETF) that seeks to mirror the total return, encompassing both capital appreciation and income, of the Nasdaq AlphaDEX Germany Index. Its primary goal is to deliver investment results that broadly align with this specific equity benchmark, before accounting for the fund's own operational costs and fees.
FGM (First Trust Germany AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $85.1M, a beta of 1.16 versus the broader market, a 52-week range of 52.93-71.12, average daily share volume of 10K, a public-listing history dating back to 2012. These structural characteristics shape how FGM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.16 places FGM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FGM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on FGM?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current FGM snapshot
As of June 29, 2026, spot at $62.75, ATM IV 33.40%, IV rank 2.23%, expected move 9.58%. The bear put spread on FGM 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 53-day expiry.
Why this bear put spread structure on FGM specifically: FGM IV at 33.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a FGM bear put spread, with a market-implied 1-standard-deviation move of approximately 9.58% (roughly $6.01 on the underlying). The 53-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FGM expiries trade a higher absolute premium for lower per-day decay. Position sizing on FGM should anchor to the underlying notional of $62.75 per share and to the trader's directional view on FGM etf.
FGM bear put spread setup
The FGM bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FGM near $62.75, the first option leg uses a $63.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FGM chain at a 53-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 FGM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $63.00 | $2.39 |
| Sell 1 | Put | $60.00 | $1.14 |
FGM bear put spread risk and reward
- Net Premium / Debit
- -$125.00
- Max Profit (per contract)
- $175.00
- Max Loss (per contract)
- -$125.00
- Breakeven(s)
- $61.75
- Risk / Reward Ratio
- 1.400
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
FGM bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on FGM. 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% | +$175.00 |
| $13.88 | -77.9% | +$175.00 |
| $27.76 | -55.8% | +$175.00 |
| $41.63 | -33.7% | +$175.00 |
| $55.50 | -11.5% | +$175.00 |
| $69.38 | +10.6% | -$125.00 |
| $83.25 | +32.7% | -$125.00 |
| $97.12 | +54.8% | -$125.00 |
| $111.00 | +76.9% | -$125.00 |
| $124.87 | +99.0% | -$125.00 |
When traders use bear put spread on FGM
Bear put spreads on FGM reduce the cost of a bearish FGM etf position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
FGM thesis for this bear put spread
The market-implied 1-standard-deviation range for FGM extends from approximately $56.74 on the downside to $68.76 on the upside. A FGM bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on FGM, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current FGM IV rank near 2.23% 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 FGM at 33.40%. As a Financial Services name, FGM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FGM-specific events.
FGM bear put spread positions are structurally moderately bearish; 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. FGM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FGM alongside the broader basket even when FGM-specific fundamentals are unchanged. Long-premium structures like a bear put spread on FGM are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current FGM chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on FGM?
- A bear put spread on FGM is the bear put spread strategy applied to FGM (etf). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With FGM etf trading near $62.75, the strikes shown on this page are snapped to the nearest listed FGM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FGM bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the FGM bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 33.40%), the computed maximum profit is $175.00 per contract and the computed maximum loss is -$125.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FGM bear put spread?
- The breakeven for the FGM bear put spread priced on this page is roughly $61.75 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 FGM market-implied 1-standard-deviation expected move is approximately 9.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on FGM?
- Bear put spreads on FGM reduce the cost of a bearish FGM etf position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current FGM implied volatility affect this bear put spread?
- FGM ATM IV is at 33.40% with IV rank near 2.23%, 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.