How are KNGZ 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 KNGZ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.30%), the computed maximum profit is $147.40 per contract and the computed maximum loss is -$34.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KNGZ butterfly?

The breakeven for the KNGZ butterfly priced on this page is roughly $38.34 and $41.66 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 KNGZ market-implied 1-standard-deviation expected move is approximately 9.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KNGZ implied volatility affect this butterfly?

KNGZ ATM IV is at 34.30% with IV rank near 36.92%, 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.

KNGZ Butterfly Strategy

KNGZ (First Trust S&P 500 Diversified Dividend Aristocrats ETF), in the Financial Services sector, (Asset Management - Income industry), listed on NASDAQ.

The First Trust S&P 500 Diversified Dividend Aristocrats ETF (KNGZ) endeavors to achieve investment results that broadly mirror the market price movements and income stream (before its own operational costs) of a specific equity benchmark. This benchmark is known as the S&P 500 Sector-Neutral Dividend Aristocrats Index. Under typical market conditions, the Fund commits a minimum of 90% of its net assets (including any borrowed capital utilized for investment) to the securities that make up this Index. Adopting a passive indexing strategy, the Fund aims to precisely replicate, prior to its fees and expenses, the Index's comprehensive total return, which naturally includes all dividends distributed by the common stocks within it.

KNGZ (First Trust S&P 500 Diversified Dividend Aristocrats ETF) trades in the Financial Services sector, specifically Asset Management - Income, with a market capitalization of approximately $63.5M, a beta of 0.92 versus the broader market, a 52-week range of 33.113-42.025, average daily share volume of 6K, a public-listing history dating back to 2017. These structural characteristics shape how KNGZ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.92 places KNGZ roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. KNGZ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on KNGZ?

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 KNGZ snapshot

As of June 26, 2026, spot at $40.01, ATM IV 34.30%, IV rank 36.92%, expected move 9.83%. The butterfly on KNGZ 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 18-day expiry.

Why this butterfly structure on KNGZ specifically: KNGZ IV at 34.30% 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 9.83% (roughly $3.93 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KNGZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on KNGZ should anchor to the underlying notional of $40.01 per share and to the trader's directional view on KNGZ etf.

KNGZ butterfly setup

The KNGZ 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 KNGZ near $40.01, the first option leg uses a $38.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KNGZ chain at a 18-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 KNGZ shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$38.00	$2.50
Sell 2	Call	$40.00	$1.38
Buy 1	Call	$42.00	$0.60

KNGZ butterfly risk and reward

Net Premium / Debit: -$34.00
Max Profit (per contract): $147.40
Max Loss (per contract): -$34.00
Breakeven(s): $38.34, $41.66
Risk / Reward Ratio: 4.335

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.

KNGZ butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on KNGZ. 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%	-$34.00
$8.86	-77.9%	-$34.00
$17.70	-55.8%	-$34.00
$26.55	-33.7%	-$34.00
$35.39	-11.5%	-$34.00
$44.24	+10.6%	-$34.00
$53.08	+32.7%	-$34.00
$61.93	+54.8%	-$34.00
$70.77	+76.9%	-$34.00
$79.62	+99.0%	-$34.00

When traders use butterfly on KNGZ

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

KNGZ thesis for this butterfly

The market-implied 1-standard-deviation range for KNGZ extends from approximately $36.08 on the downside to $43.94 on the upside. A KNGZ long call butterfly is a pinning play: it pays maximum at the middle strike if KNGZ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KNGZ IV rank near 36.92% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on KNGZ should anchor more to the directional view and the expected-move geometry. As a Financial Services name, KNGZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KNGZ-specific events.

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

Frequently asked questions

What is a butterfly on KNGZ?: A butterfly on KNGZ is the butterfly strategy applied to KNGZ (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 KNGZ etf trading near $40.01, the strikes shown on this page are snapped to the nearest listed KNGZ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KNGZ 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 KNGZ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.30%), the computed maximum profit is $147.40 per contract and the computed maximum loss is -$34.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KNGZ butterfly?: The breakeven for the KNGZ butterfly priced on this page is roughly $38.34 and $41.66 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 KNGZ market-implied 1-standard-deviation expected move is approximately 9.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on KNGZ?: Butterflies on KNGZ are pinning bets - traders use them when they expect KNGZ 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 KNGZ implied volatility affect this butterfly?: KNGZ ATM IV is at 34.30% with IV rank near 36.92%, 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.