INCO Butterfly Strategy
INCO (Columbia India Consumer ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund will invest at least 80% of its net assets in Indian consumer companies included in the index and the advisor generally expects to be substantially invested at such times, with at least 95% of its net assets invested in these securities. The index is a maximum 30-stock free-float adjusted market capitalization-weighted index designed to measure the market performance of companies in the consumer industry in India, as defined by Indxx's proprietary methodology. It is non-diversified.
INCO (Columbia India Consumer ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $278.1M, a beta of 0.71 versus the broader market, a 52-week range of 53.19-68.02, average daily share volume of 55K, a public-listing history dating back to 2011. These structural characteristics shape how INCO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.71 places INCO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. INCO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on INCO?
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 INCO snapshot
As of May 15, 2026, spot at $57.79, ATM IV 486.60%, IV rank 97.75%, expected move 139.50%. The butterfly on INCO 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 INCO specifically: INCO IV at 486.60% is rich versus its 1-year range, which makes a premium-buying INCO butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 139.50% (roughly $80.62 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 INCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on INCO should anchor to the underlying notional of $57.79 per share and to the trader's directional view on INCO etf.
INCO butterfly setup
The INCO 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 INCO near $57.79, the first option leg uses a $55.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed INCO 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 INCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $55.00 | $3.80 |
| Sell 2 | Call | $58.00 | $1.70 |
| Buy 1 | Call | $61.00 | $0.56 |
INCO butterfly risk and reward
- Net Premium / Debit
- -$96.00
- Max Profit (per contract)
- $195.46
- Max Loss (per contract)
- -$96.00
- Breakeven(s)
- $55.96, $60.04
- Risk / Reward Ratio
- 2.036
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.
INCO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on INCO. 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% | -$96.00 |
| $12.79 | -77.9% | -$96.00 |
| $25.56 | -55.8% | -$96.00 |
| $38.34 | -33.7% | -$96.00 |
| $51.12 | -11.5% | -$96.00 |
| $63.89 | +10.6% | -$96.00 |
| $76.67 | +32.7% | -$96.00 |
| $89.45 | +54.8% | -$96.00 |
| $102.22 | +76.9% | -$96.00 |
| $115.00 | +99.0% | -$96.00 |
When traders use butterfly on INCO
Butterflies on INCO are pinning bets - traders use them when they expect INCO 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.
INCO thesis for this butterfly
The market-implied 1-standard-deviation range for INCO extends from approximately $-22.83 on the downside to $138.41 on the upside. A INCO long call butterfly is a pinning play: it pays maximum at the middle strike if INCO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current INCO IV rank near 97.75% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on INCO at 486.60%. As a Financial Services name, INCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to INCO-specific events.
INCO 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. INCO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move INCO alongside the broader basket even when INCO-specific fundamentals are unchanged. Always rebuild the position from current INCO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on INCO?
- A butterfly on INCO is the butterfly strategy applied to INCO (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 INCO etf trading near $57.79, the strikes shown on this page are snapped to the nearest listed INCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are INCO 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 INCO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 486.60%), the computed maximum profit is $195.46 per contract and the computed maximum loss is -$96.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a INCO butterfly?
- The breakeven for the INCO butterfly priced on this page is roughly $55.96 and $60.04 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 INCO market-implied 1-standard-deviation expected move is approximately 139.50%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on INCO?
- Butterflies on INCO are pinning bets - traders use them when they expect INCO 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 INCO implied volatility affect this butterfly?
- INCO ATM IV is at 486.60% with IV rank near 97.75%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.