How are IQM 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 IQM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $468.92 per contract and the computed maximum loss is -$115.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a IQM butterfly?

The breakeven for the IQM butterfly priced on this page is roughly $108.15 and $118.28 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 IQM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current IQM implied volatility affect this butterfly?

IQM ATM IV is at 32.50% with IV rank near 3.59%, 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.

IQM Butterfly Strategy

IQM (Franklin Intelligent Machines ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.

Franklin Templeton ETF Trust - Franklin Intelligent Machines ETF is an exchange traded fund launched by Franklin Resources, Inc. The fund is managed by Franklin Advisers, Inc. It invests in public equity markets of global region. The fund invests in stocks of companies operating across information technology, software and services, software, systems software, automation products and services, software research, artificial intelligence software sectors. It invests in growth and value stocks of companies across diversified market capitalization. It invests in stocks of companies that are deemed socially conscious in their business dealings and directly promote environmental responsibility.

IQM (Franklin Intelligent Machines ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $65.2M, a beta of 1.65 versus the broader market, a 52-week range of 77.12-126.21, average daily share volume of 9K, a public-listing history dating back to 2020. These structural characteristics shape how IQM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.65 indicates IQM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. IQM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on IQM?

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.

IQM snapshot

As of August 14, 2026, spot at $112.59, ATM IV 32.50%, IV rank 3.59%, expected move 9.32%. The butterfly on IQM 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 35-day expiry.

Why this butterfly structure on IQM specifically: IQM IV at 32.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a IQM butterfly, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $10.49 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated IQM expiries trade a higher absolute premium for lower per-day decay. Position sizing on IQM should anchor to the underlying notional of $112.59 per share and to the trader's directional view on IQM etf.

IQM butterfly setup

The IQM 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 IQM at $112.59 on that close, the first option leg uses a $107.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IQM chain at a 35-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 IQM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$107.00	$8.10
Sell 2	Call	$113.00	$4.70
Buy 1	Call	$118.00	$2.45

IQM butterfly risk and reward

Net Premium / Debit: -$115.00
Max Profit (per contract): $468.92
Max Loss (per contract): -$115.00
Breakeven(s): $108.15, $118.28
Risk / Reward Ratio: 4.078

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.

IQM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on IQM. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$115.00
$24.90	-77.9%	-$115.00
$49.80	-55.8%	-$115.00
$74.69	-33.7%	-$115.00
$99.58	-11.6%	-$115.00
$124.48	+10.6%	-$15.00
$149.37	+32.7%	-$15.00
$174.26	+54.8%	-$15.00
$199.16	+76.9%	-$15.00
$224.05	+99.0%	-$15.00

When traders use butterfly on IQM

Butterflies on IQM are pinning bets - traders use them when they expect IQM 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.

IQM thesis for this butterfly

The market-implied 1-standard-deviation range for IQM extends from approximately $102.10 on the downside to $123.08 on the upside. A IQM long call butterfly is a pinning play: it pays maximum at the middle strike if IQM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current IQM IV rank near 3.59% 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 IQM at 32.50%. As a Financial Services name, IQM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IQM-specific events.

IQM 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. IQM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move IQM alongside the broader basket even when IQM-specific fundamentals are unchanged. Always rebuild the position from current IQM chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on IQM?: A butterfly on IQM is the butterfly strategy applied to IQM (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 IQM etf at $112.59 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed IQM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are IQM 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 IQM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $468.92 per contract and the computed maximum loss is -$115.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a IQM butterfly?: The breakeven for the IQM butterfly priced on this page is roughly $108.15 and $118.28 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 IQM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on IQM?: Butterflies on IQM are pinning bets - traders use them when they expect IQM 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 IQM implied volatility affect this butterfly?: IQM ATM IV is at 32.50% with IV rank near 3.59%, 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.