FTXH Butterfly Strategy
FTXH (First Trust Nasdaq Pharmaceuticals ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The First Trust Nasdaq Pharmaceuticals ETF is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an index called the Nasdaq US Smart Pharmaceuticals Index. The Fund seeks to replicate the holdings and weightings of the Nasdaq US Smart Pharmaceuticals Index so as to generate performance results 95% correlated to that of the Nasdaq US Smart Pharmaceuticals Index.
FTXH (First Trust Nasdaq Pharmaceuticals ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $34.6M, a beta of 0.50 versus the broader market, a 52-week range of 24.36-35.611, average daily share volume of 8K, a public-listing history dating back to 2016. These structural characteristics shape how FTXH etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.50 indicates FTXH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FTXH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FTXH?
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 FTXH snapshot
As of May 14, 2026, spot at $34.40, ATM IV 31.10%, IV rank 10.01%, expected move 8.92%. The butterfly on FTXH 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 63-day expiry.
Why this butterfly structure on FTXH specifically: FTXH IV at 31.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a FTXH butterfly, with a market-implied 1-standard-deviation move of approximately 8.92% (roughly $3.07 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FTXH expiries trade a higher absolute premium for lower per-day decay. Position sizing on FTXH should anchor to the underlying notional of $34.40 per share and to the trader's directional view on FTXH etf.
FTXH butterfly setup
The FTXH 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 FTXH near $34.40, the first option leg uses a $33.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FTXH chain at a 63-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 FTXH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $33.00 | $2.18 |
| Sell 2 | Call | $34.00 | $1.65 |
| Buy 1 | Call | $36.00 | $0.87 |
FTXH butterfly risk and reward
- Net Premium / Debit
- +$25.00
- Max Profit (per contract)
- $113.65
- Max Loss (per contract)
- -$75.00
- Breakeven(s)
- $35.25
- Risk / Reward Ratio
- 1.515
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.
FTXH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FTXH. 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% | +$25.00 |
| $7.61 | -77.9% | +$25.00 |
| $15.22 | -55.8% | +$25.00 |
| $22.82 | -33.6% | +$25.00 |
| $30.43 | -11.5% | +$25.00 |
| $38.03 | +10.6% | -$75.00 |
| $45.64 | +32.7% | -$75.00 |
| $53.24 | +54.8% | -$75.00 |
| $60.85 | +76.9% | -$75.00 |
| $68.45 | +99.0% | -$75.00 |
When traders use butterfly on FTXH
Butterflies on FTXH are pinning bets - traders use them when they expect FTXH 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.
FTXH thesis for this butterfly
The market-implied 1-standard-deviation range for FTXH extends from approximately $31.33 on the downside to $37.47 on the upside. A FTXH long call butterfly is a pinning play: it pays maximum at the middle strike if FTXH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FTXH IV rank near 10.01% 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 FTXH at 31.10%. As a Financial Services name, FTXH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FTXH-specific events.
FTXH 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. FTXH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FTXH alongside the broader basket even when FTXH-specific fundamentals are unchanged. Always rebuild the position from current FTXH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FTXH?
- A butterfly on FTXH is the butterfly strategy applied to FTXH (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 FTXH etf trading near $34.40, the strikes shown on this page are snapped to the nearest listed FTXH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FTXH 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 FTXH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.10%), the computed maximum profit is $113.65 per contract and the computed maximum loss is -$75.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FTXH butterfly?
- The breakeven for the FTXH butterfly priced on this page is roughly $35.25 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 FTXH market-implied 1-standard-deviation expected move is approximately 8.92%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FTXH?
- Butterflies on FTXH are pinning bets - traders use them when they expect FTXH 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 FTXH implied volatility affect this butterfly?
- FTXH ATM IV is at 31.10% with IV rank near 10.01%, 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.