IGV Butterfly Strategy
IGV (iShares Expanded Tech-Software Sector ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The iShares Expanded Tech-Software Sector ETF seeks to track the investment results of an index composed of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries.
IGV (iShares Expanded Tech-Software Sector ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $12.67B, a beta of 0.92 versus the broader market, a 52-week range of 73.93-117.99, average daily share volume of 25.9M, a public-listing history dating back to 2001. These structural characteristics shape how IGV etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.92 places IGV roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on IGV?
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 IGV snapshot
As of May 15, 2026, spot at $91.93, ATM IV 36.13%, IV rank 66.27%, expected move 10.36%. The butterfly on IGV 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 28-day expiry.
Why this butterfly structure on IGV specifically: IGV IV at 36.13% 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 10.36% (roughly $9.52 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 IGV expiries trade a higher absolute premium for lower per-day decay. Position sizing on IGV should anchor to the underlying notional of $91.93 per share and to the trader's directional view on IGV etf.
IGV butterfly setup
The IGV 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 IGV near $91.93, the first option leg uses a $87.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IGV 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 IGV shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $87.50 | $6.55 |
| Sell 2 | Call | $92.00 | $3.80 |
| Buy 1 | Call | $95.00 | $2.43 |
IGV butterfly risk and reward
- Net Premium / Debit
- -$137.50
- Max Profit (per contract)
- $272.81
- Max Loss (per contract)
- -$137.50
- Breakeven(s)
- $88.88
- Risk / Reward Ratio
- 1.984
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.
IGV butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on IGV. 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% | -$137.50 |
| $20.34 | -77.9% | -$137.50 |
| $40.66 | -55.8% | -$137.50 |
| $60.99 | -33.7% | -$137.50 |
| $81.31 | -11.6% | -$137.50 |
| $101.64 | +10.6% | +$12.50 |
| $121.96 | +32.7% | +$12.50 |
| $142.29 | +54.8% | +$12.50 |
| $162.61 | +76.9% | +$12.50 |
| $182.94 | +99.0% | +$12.50 |
When traders use butterfly on IGV
Butterflies on IGV are pinning bets - traders use them when they expect IGV 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.
IGV thesis for this butterfly
The market-implied 1-standard-deviation range for IGV extends from approximately $82.41 on the downside to $101.45 on the upside. A IGV long call butterfly is a pinning play: it pays maximum at the middle strike if IGV settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current IGV IV rank near 66.27% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on IGV should anchor more to the directional view and the expected-move geometry. As a Financial Services name, IGV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IGV-specific events.
IGV 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. IGV positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move IGV alongside the broader basket even when IGV-specific fundamentals are unchanged. Always rebuild the position from current IGV chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on IGV?
- A butterfly on IGV is the butterfly strategy applied to IGV (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 IGV etf trading near $91.93, the strikes shown on this page are snapped to the nearest listed IGV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are IGV 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 IGV butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 36.13%), the computed maximum profit is $272.81 per contract and the computed maximum loss is -$137.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a IGV butterfly?
- The breakeven for the IGV butterfly priced on this page is roughly $88.88 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 IGV market-implied 1-standard-deviation expected move is approximately 10.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on IGV?
- Butterflies on IGV are pinning bets - traders use them when they expect IGV 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 IGV implied volatility affect this butterfly?
- IGV ATM IV is at 36.13% with IV rank near 66.27%, 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.