FXI Butterfly Strategy
FXI (iShares China Large-Cap ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.
The iShares China Large-Cap ETF aims to mirror the performance of an index consisting of major Chinese companies whose shares are traded on the Hong Kong Stock Exchange.
FXI (iShares China Large-Cap ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $4.20B, a beta of 0.47 versus the broader market, a 52-week range of 31.19-42, average daily share volume of 26.5M, a public-listing history dating back to 2004. These structural characteristics shape how FXI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.47 indicates FXI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FXI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FXI?
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.
FXI snapshot
As of August 14, 2026, spot at $34.92, ATM IV 19.10%, IV rank 7.71%, expected move 5.48%. The butterfly on FXI 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 28-day expiry.
Why this butterfly structure on FXI specifically: FXI IV at 19.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a FXI butterfly, with a market-implied 1-standard-deviation move of approximately 5.48% (roughly $1.91 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FXI expiries trade a higher absolute premium for lower per-day decay. Position sizing on FXI should anchor to the underlying notional of $34.92 per share and to the trader's directional view on FXI etf.
FXI butterfly setup
The FXI 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 FXI at $34.92 on that close, 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 FXI chain at a 28-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 FXI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $33.00 | $2.11 |
| Sell 2 | Call | $35.00 | $0.75 |
| Buy 1 | Call | $36.50 | $0.24 |
FXI butterfly risk and reward
- Net Premium / Debit
- -$85.00
- Max Profit (per contract)
- $104.95
- Max Loss (per contract)
- -$85.00
- Breakeven(s)
- $33.85, $36.15
- Risk / Reward Ratio
- 1.235
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.
FXI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FXI. 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% | -$85.00 |
| $7.73 | -77.9% | -$85.00 |
| $15.45 | -55.8% | -$85.00 |
| $23.17 | -33.6% | -$85.00 |
| $30.89 | -11.5% | -$85.00 |
| $38.61 | +10.6% | -$35.00 |
| $46.33 | +32.7% | -$35.00 |
| $54.05 | +54.8% | -$35.00 |
| $61.77 | +76.9% | -$35.00 |
| $69.49 | +99.0% | -$35.00 |
When traders use butterfly on FXI
Butterflies on FXI are pinning bets - traders use them when they expect FXI 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.
FXI thesis for this butterfly
The market-implied 1-standard-deviation range for FXI extends from approximately $33.01 on the downside to $36.83 on the upside. A FXI long call butterfly is a pinning play: it pays maximum at the middle strike if FXI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FXI IV rank near 7.71% 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 FXI at 19.10%. As a Financial Services name, FXI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FXI-specific events.
FXI 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. FXI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FXI alongside the broader basket even when FXI-specific fundamentals are unchanged. Always rebuild the position from current FXI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FXI?
- A butterfly on FXI is the butterfly strategy applied to FXI (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 FXI etf at $34.92 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FXI chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FXI 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 FXI butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 19.10%), the computed maximum profit is $104.95 per contract and the computed maximum loss is -$85.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FXI butterfly?
- The breakeven for the FXI butterfly priced on this page is roughly $33.85 and $36.15 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 FXI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FXI?
- Butterflies on FXI are pinning bets - traders use them when they expect FXI 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 FXI implied volatility affect this butterfly?
- FXI ATM IV is at 19.10% with IV rank near 7.71%, 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.