HRTS Butterfly Strategy
HRTS (Tema Cardiovascular and Metabolic ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The Tema Heart & Health ETF (HRTS) seeks to invest in companies that potentially stand to benefit from further advances in biotechnology and healthcare, specifically companies involved in cardiology, metabolic diseases and weight loss therapies.
HRTS (Tema Cardiovascular and Metabolic ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $51.1M, a beta of 0.71 versus the broader market, a 52-week range of 26.5-36.649, average daily share volume of 5K, a public-listing history dating back to 2023. These structural characteristics shape how HRTS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.71 places HRTS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. HRTS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on HRTS?
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 HRTS snapshot
As of May 15, 2026, spot at $33.51, ATM IV 31.80%, IV rank 30.53%, expected move 9.12%. The butterfly on HRTS 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 HRTS specifically: HRTS IV at 31.80% 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 9.12% (roughly $3.06 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 HRTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on HRTS should anchor to the underlying notional of $33.51 per share and to the trader's directional view on HRTS etf.
HRTS butterfly setup
The HRTS 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 HRTS near $33.51, the first option leg uses a $32.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HRTS 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 HRTS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $32.00 | $2.40 |
| Sell 2 | Call | $34.00 | $1.13 |
| Buy 1 | Call | $35.00 | $0.75 |
HRTS butterfly risk and reward
- Net Premium / Debit
- -$89.00
- Max Profit (per contract)
- $108.99
- Max Loss (per contract)
- -$89.00
- Breakeven(s)
- $32.89
- Risk / Reward Ratio
- 1.225
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.
HRTS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HRTS. 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% | -$89.00 |
| $7.42 | -77.9% | -$89.00 |
| $14.83 | -55.8% | -$89.00 |
| $22.23 | -33.6% | -$89.00 |
| $29.64 | -11.5% | -$89.00 |
| $37.05 | +10.6% | +$11.00 |
| $44.46 | +32.7% | +$11.00 |
| $51.87 | +54.8% | +$11.00 |
| $59.28 | +76.9% | +$11.00 |
| $66.68 | +99.0% | +$11.00 |
When traders use butterfly on HRTS
Butterflies on HRTS are pinning bets - traders use them when they expect HRTS 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.
HRTS thesis for this butterfly
The market-implied 1-standard-deviation range for HRTS extends from approximately $30.45 on the downside to $36.57 on the upside. A HRTS long call butterfly is a pinning play: it pays maximum at the middle strike if HRTS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HRTS IV rank near 30.53% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on HRTS should anchor more to the directional view and the expected-move geometry. As a Financial Services name, HRTS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HRTS-specific events.
HRTS 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. HRTS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HRTS alongside the broader basket even when HRTS-specific fundamentals are unchanged. Always rebuild the position from current HRTS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HRTS?
- A butterfly on HRTS is the butterfly strategy applied to HRTS (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 HRTS etf trading near $33.51, the strikes shown on this page are snapped to the nearest listed HRTS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HRTS 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 HRTS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.80%), the computed maximum profit is $108.99 per contract and the computed maximum loss is -$89.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HRTS butterfly?
- The breakeven for the HRTS butterfly priced on this page is roughly $32.89 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 HRTS market-implied 1-standard-deviation expected move is approximately 9.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HRTS?
- Butterflies on HRTS are pinning bets - traders use them when they expect HRTS 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 HRTS implied volatility affect this butterfly?
- HRTS ATM IV is at 31.80% with IV rank near 30.53%, 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.