FMED Butterfly Strategy
FMED (Fidelity Disruptive Medicine ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
This exchange-traded fund allocates capital to pioneering enterprises reshaping medical detection, treatments, and care delivery, encompassing areas from genetic manipulation to automated surgical procedures and online health ecosystems.
FMED (Fidelity Disruptive Medicine ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $69.1M, a beta of 0.75 versus the broader market, a 52-week range of 23.48-30.54, average daily share volume of 18K, a public-listing history dating back to 2023. These structural characteristics shape how FMED etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.75 places FMED roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FMED pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FMED?
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.
FMED snapshot
As of August 14, 2026, spot at $29.77, ATM IV 31.90%, expected move 9.15%. The butterfly on FMED below is built from the August 14, 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 FMED specifically: IV rank is unavailable in the current snapshot, so regime-based timing for FMED is inferred from ATM IV at 31.90% alone, with a market-implied 1-standard-deviation move of approximately 9.15% (roughly $2.72 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 FMED expiries trade a higher absolute premium for lower per-day decay. Position sizing on FMED should anchor to the underlying notional of $29.77 per share and to the trader's directional view on FMED etf.
FMED butterfly setup
The FMED butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FMED at $29.77 on that close, the first option leg uses a $28.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FMED 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 FMED shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.00 | $2.28 |
| Sell 2 | Call | $30.00 | $1.12 |
| Buy 1 | Call | $31.00 | $0.72 |
FMED butterfly risk and reward
- Net Premium / Debit
- -$75.50
- Max Profit (per contract)
- $116.96
- Max Loss (per contract)
- -$75.50
- Breakeven(s)
- $28.76
- Risk / Reward Ratio
- 1.549
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.
FMED butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FMED. 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% | -$75.50 |
| $6.59 | -77.9% | -$75.50 |
| $13.17 | -55.8% | -$75.50 |
| $19.75 | -33.6% | -$75.50 |
| $26.33 | -11.5% | -$75.50 |
| $32.92 | +10.6% | +$24.50 |
| $39.50 | +32.7% | +$24.50 |
| $46.08 | +54.8% | +$24.50 |
| $52.66 | +76.9% | +$24.50 |
| $59.24 | +99.0% | +$24.50 |
When traders use butterfly on FMED
Butterflies on FMED are pinning bets - traders use them when they expect FMED 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.
FMED thesis for this butterfly
The market-implied 1-standard-deviation range for FMED extends from approximately $27.05 on the downside to $32.49 on the upside. A FMED long call butterfly is a pinning play: it pays maximum at the middle strike if FMED 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, FMED options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FMED-specific events.
FMED 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. FMED positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FMED alongside the broader basket even when FMED-specific fundamentals are unchanged. Always rebuild the position from current FMED chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FMED?
- A butterfly on FMED is the butterfly strategy applied to FMED (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 FMED etf at $29.77 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FMED chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FMED 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 FMED butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 31.90%), the computed maximum profit is $116.96 per contract and the computed maximum loss is -$75.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FMED butterfly?
- The breakeven for the FMED butterfly priced on this page is roughly $28.76 at expiration, derived from the August 14, 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 FMED market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FMED?
- Butterflies on FMED are pinning bets - traders use them when they expect FMED 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 FMED implied volatility affect this butterfly?
- Current FMED ATM IV is 31.90%; IV rank context is unavailable in the current snapshot.