INMU Butterfly Strategy
INMU (iShares Intermediate Muni Income Active ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The iShares Intermediate Muni Income Active ETF (the “Fund”) seeks to maximize tax free current income.
INMU (iShares Intermediate Muni Income Active ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $137.3M, a beta of 0.79 versus the broader market, a 52-week range of 23.19-24.58, average daily share volume of 191K, a public-listing history dating back to 2021. These structural characteristics shape how INMU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.79 places INMU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. INMU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on INMU?
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 INMU snapshot
As of May 15, 2026, spot at $23.95, ATM IV 47.40%, IV rank 10.91%, expected move 13.59%. The butterfly on INMU 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 INMU specifically: INMU IV at 47.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a INMU butterfly, with a market-implied 1-standard-deviation move of approximately 13.59% (roughly $3.25 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 INMU expiries trade a higher absolute premium for lower per-day decay. Position sizing on INMU should anchor to the underlying notional of $23.95 per share and to the trader's directional view on INMU etf.
INMU butterfly setup
The INMU 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 INMU near $23.95, the first option leg uses a $22.75 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed INMU 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 INMU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $22.75 | N/A |
| Sell 2 | Call | $23.95 | N/A |
| Buy 1 | Call | $25.15 | N/A |
INMU butterfly risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
INMU butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on INMU. 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.
When traders use butterfly on INMU
Butterflies on INMU are pinning bets - traders use them when they expect INMU 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.
INMU thesis for this butterfly
The market-implied 1-standard-deviation range for INMU extends from approximately $20.70 on the downside to $27.20 on the upside. A INMU long call butterfly is a pinning play: it pays maximum at the middle strike if INMU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current INMU IV rank near 10.91% 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 INMU at 47.40%. As a Financial Services name, INMU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to INMU-specific events.
INMU 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. INMU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move INMU alongside the broader basket even when INMU-specific fundamentals are unchanged. Always rebuild the position from current INMU chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on INMU?
- A butterfly on INMU is the butterfly strategy applied to INMU (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 INMU etf trading near $23.95, the strikes shown on this page are snapped to the nearest listed INMU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are INMU 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 INMU butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 47.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a INMU butterfly?
- The breakeven for the INMU butterfly priced on this page is no defined breakeven on the modeled curve 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 INMU market-implied 1-standard-deviation expected move is approximately 13.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on INMU?
- Butterflies on INMU are pinning bets - traders use them when they expect INMU 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 INMU implied volatility affect this butterfly?
- INMU ATM IV is at 47.40% with IV rank near 10.91%, 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.