FTLS Butterfly Strategy
FTLS (First Trust Long/Short Equity ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Fund's investment objective is to seek to provide investors with long term total return. The Fund intends to pursue its investment objective by establishing long and short positions in a portfolio of Equity Securities.
FTLS (First Trust Long/Short Equity ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.30B, a beta of 0.50 versus the broader market, a 52-week range of 64.47-74.79, average daily share volume of 93K, a public-listing history dating back to 2014. These structural characteristics shape how FTLS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.50 indicates FTLS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FTLS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FTLS?
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 FTLS snapshot
As of May 15, 2026, spot at $74.09, ATM IV 22.70%, IV rank 16.98%, expected move 6.51%. The butterfly on FTLS 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 FTLS specifically: FTLS IV at 22.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a FTLS butterfly, with a market-implied 1-standard-deviation move of approximately 6.51% (roughly $4.82 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 FTLS expiries trade a higher absolute premium for lower per-day decay. Position sizing on FTLS should anchor to the underlying notional of $74.09 per share and to the trader's directional view on FTLS etf.
FTLS butterfly setup
The FTLS 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 FTLS near $74.09, the first option leg uses a $70.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FTLS 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 FTLS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $70.00 | $4.10 |
| Sell 2 | Call | $74.00 | $2.25 |
| Buy 1 | Call | $78.00 | $0.78 |
FTLS butterfly risk and reward
- Net Premium / Debit
- -$38.00
- Max Profit (per contract)
- $334.27
- Max Loss (per contract)
- -$38.00
- Breakeven(s)
- $70.38, $77.68
- Risk / Reward Ratio
- 8.797
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.
FTLS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FTLS. 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% | -$38.00 |
| $16.39 | -77.9% | -$38.00 |
| $32.77 | -55.8% | -$38.00 |
| $49.15 | -33.7% | -$38.00 |
| $65.53 | -11.6% | -$38.00 |
| $81.91 | +10.6% | -$38.00 |
| $98.29 | +32.7% | -$38.00 |
| $114.67 | +54.8% | -$38.00 |
| $131.05 | +76.9% | -$38.00 |
| $147.44 | +99.0% | -$38.00 |
When traders use butterfly on FTLS
Butterflies on FTLS are pinning bets - traders use them when they expect FTLS 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.
FTLS thesis for this butterfly
The market-implied 1-standard-deviation range for FTLS extends from approximately $69.27 on the downside to $78.91 on the upside. A FTLS long call butterfly is a pinning play: it pays maximum at the middle strike if FTLS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FTLS IV rank near 16.98% 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 FTLS at 22.70%. As a Financial Services name, FTLS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FTLS-specific events.
FTLS 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. FTLS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FTLS alongside the broader basket even when FTLS-specific fundamentals are unchanged. Always rebuild the position from current FTLS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FTLS?
- A butterfly on FTLS is the butterfly strategy applied to FTLS (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 FTLS etf trading near $74.09, the strikes shown on this page are snapped to the nearest listed FTLS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FTLS 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 FTLS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.70%), the computed maximum profit is $334.27 per contract and the computed maximum loss is -$38.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FTLS butterfly?
- The breakeven for the FTLS butterfly priced on this page is roughly $70.38 and $77.68 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 FTLS market-implied 1-standard-deviation expected move is approximately 6.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FTLS?
- Butterflies on FTLS are pinning bets - traders use them when they expect FTLS 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 FTLS implied volatility affect this butterfly?
- FTLS ATM IV is at 22.70% with IV rank near 16.98%, 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.