FXH Butterfly Strategy
FXH (First Trust Health Care AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The First Trust Health Care AlphaDEX Fund 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 fees and expenses, of an equity index called the StrataQuant Health Care Index.
FXH (First Trust Health Care AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $888.0M, a beta of 0.88 versus the broader market, a 52-week range of 97.52-120.34, average daily share volume of 18K, a public-listing history dating back to 2007. These structural characteristics shape how FXH etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places FXH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FXH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FXH?
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 FXH snapshot
As of May 15, 2026, spot at $112.73, ATM IV 20.20%, IV rank 31.70%, expected move 5.79%. The butterfly on FXH 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 FXH specifically: FXH IV at 20.20% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 5.79% (roughly $6.53 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 FXH expiries trade a higher absolute premium for lower per-day decay. Position sizing on FXH should anchor to the underlying notional of $112.73 per share and to the trader's directional view on FXH etf.
FXH butterfly setup
The FXH 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 FXH near $112.73, the first option leg uses a $107.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FXH 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 FXH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $107.00 | $7.50 |
| Sell 2 | Call | $113.00 | $3.45 |
| Buy 1 | Call | $118.00 | $1.25 |
FXH butterfly risk and reward
- Net Premium / Debit
- -$185.00
- Max Profit (per contract)
- $384.85
- Max Loss (per contract)
- -$185.00
- Breakeven(s)
- $108.85, $117.15
- Risk / Reward Ratio
- 2.080
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.
FXH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FXH. 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% | -$185.00 |
| $24.93 | -77.9% | -$185.00 |
| $49.86 | -55.8% | -$185.00 |
| $74.78 | -33.7% | -$185.00 |
| $99.71 | -11.6% | -$185.00 |
| $124.63 | +10.6% | -$85.00 |
| $149.55 | +32.7% | -$85.00 |
| $174.48 | +54.8% | -$85.00 |
| $199.40 | +76.9% | -$85.00 |
| $224.33 | +99.0% | -$85.00 |
When traders use butterfly on FXH
Butterflies on FXH are pinning bets - traders use them when they expect FXH 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.
FXH thesis for this butterfly
The market-implied 1-standard-deviation range for FXH extends from approximately $106.20 on the downside to $119.26 on the upside. A FXH long call butterfly is a pinning play: it pays maximum at the middle strike if FXH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FXH IV rank near 31.70% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FXH should anchor more to the directional view and the expected-move geometry. As a Financial Services name, FXH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FXH-specific events.
FXH 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. FXH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FXH alongside the broader basket even when FXH-specific fundamentals are unchanged. Always rebuild the position from current FXH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FXH?
- A butterfly on FXH is the butterfly strategy applied to FXH (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 FXH etf trading near $112.73, the strikes shown on this page are snapped to the nearest listed FXH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FXH 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 FXH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 20.20%), the computed maximum profit is $384.85 per contract and the computed maximum loss is -$185.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FXH butterfly?
- The breakeven for the FXH butterfly priced on this page is roughly $108.85 and $117.15 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 FXH market-implied 1-standard-deviation expected move is approximately 5.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FXH?
- Butterflies on FXH are pinning bets - traders use them when they expect FXH 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 FXH implied volatility affect this butterfly?
- FXH ATM IV is at 20.20% with IV rank near 31.70%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.