FMAG Butterfly Strategy
FMAG (Fidelity Magellan ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
Opportunistically invests in high-quality cyclical growth stocks and steady growers that seek to benefit from long-term megatrends.
FMAG (Fidelity Magellan ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $254.1M, a beta of 1.12 versus the broader market, a 52-week range of 30.49-36.33, average daily share volume of 25K, a public-listing history dating back to 2021. These structural characteristics shape how FMAG etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.12 places FMAG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FMAG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FMAG?
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 FMAG snapshot
As of May 15, 2026, spot at $36.08, ATM IV 29.10%, expected move 8.34%. The butterfly on FMAG 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 FMAG specifically: IV rank is unavailable in the current snapshot, so regime-based timing for FMAG is inferred from ATM IV at 29.10% alone, with a market-implied 1-standard-deviation move of approximately 8.34% (roughly $3.01 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 FMAG expiries trade a higher absolute premium for lower per-day decay. Position sizing on FMAG should anchor to the underlying notional of $36.08 per share and to the trader's directional view on FMAG etf.
FMAG butterfly setup
The FMAG 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 FMAG near $36.08, the first option leg uses a $34.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FMAG 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 FMAG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $34.00 | $2.18 |
| Sell 2 | Call | $36.00 | $1.39 |
| Buy 1 | Call | $38.00 | $0.62 |
FMAG butterfly risk and reward
- Net Premium / Debit
- -$1.50
- Max Profit (per contract)
- $188.87
- Max Loss (per contract)
- -$1.50
- Breakeven(s)
- $33.79, $38.06
- Risk / Reward Ratio
- 125.915
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.
FMAG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FMAG. 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% | -$1.50 |
| $7.99 | -77.9% | -$1.50 |
| $15.96 | -55.8% | -$1.50 |
| $23.94 | -33.6% | -$1.50 |
| $31.92 | -11.5% | -$1.50 |
| $39.89 | +10.6% | -$1.50 |
| $47.87 | +32.7% | -$1.50 |
| $55.84 | +54.8% | -$1.50 |
| $63.82 | +76.9% | -$1.50 |
| $71.80 | +99.0% | -$1.50 |
When traders use butterfly on FMAG
Butterflies on FMAG are pinning bets - traders use them when they expect FMAG 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.
FMAG thesis for this butterfly
The market-implied 1-standard-deviation range for FMAG extends from approximately $33.07 on the downside to $39.09 on the upside. A FMAG long call butterfly is a pinning play: it pays maximum at the middle strike if FMAG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Financial Services name, FMAG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FMAG-specific events.
FMAG 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. FMAG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FMAG alongside the broader basket even when FMAG-specific fundamentals are unchanged. Always rebuild the position from current FMAG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FMAG?
- A butterfly on FMAG is the butterfly strategy applied to FMAG (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 FMAG etf trading near $36.08, the strikes shown on this page are snapped to the nearest listed FMAG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FMAG 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 FMAG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.10%), the computed maximum profit is $188.87 per contract and the computed maximum loss is -$1.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FMAG butterfly?
- The breakeven for the FMAG butterfly priced on this page is roughly $33.79 and $38.06 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 FMAG market-implied 1-standard-deviation expected move is approximately 8.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FMAG?
- Butterflies on FMAG are pinning bets - traders use them when they expect FMAG 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 FMAG implied volatility affect this butterfly?
- Current FMAG ATM IV is 29.10%; IV rank context is unavailable in the current snapshot.