MAGS Butterfly Strategy
MAGS (Roundhill Investments - Magnificent Seven ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The Roundhill Magnificent Seven ETF offers equal weight exposure to the “Magnificent Seven” stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. MAGS is the first-ever ETF to track the Magnificent Seven.
MAGS (Roundhill Investments - Magnificent Seven ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $3.68B, a beta of 1.21 versus the broader market, a 52-week range of 50.77-70.77, average daily share volume of 4.1M, a public-listing history dating back to 2023, approximately 394 full-time employees. These structural characteristics shape how MAGS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.21 places MAGS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MAGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on MAGS?
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 MAGS snapshot
As of May 15, 2026, spot at $70.09, ATM IV 26.80%, IV rank 59.30%, expected move 7.68%. The butterfly on MAGS 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 MAGS specifically: MAGS IV at 26.80% 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 7.68% (roughly $5.39 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 MAGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on MAGS should anchor to the underlying notional of $70.09 per share and to the trader's directional view on MAGS etf.
MAGS butterfly setup
The MAGS 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 MAGS near $70.09, the first option leg uses a $66.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MAGS 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 MAGS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $66.50 | $4.80 |
| Sell 2 | Call | $70.00 | $2.35 |
| Buy 1 | Call | $73.50 | $0.83 |
MAGS butterfly risk and reward
- Net Premium / Debit
- -$92.50
- Max Profit (per contract)
- $231.78
- Max Loss (per contract)
- -$92.50
- Breakeven(s)
- $67.43, $72.58
- Risk / Reward Ratio
- 2.506
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.
MAGS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MAGS. 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% | -$92.50 |
| $15.51 | -77.9% | -$92.50 |
| $31.00 | -55.8% | -$92.50 |
| $46.50 | -33.7% | -$92.50 |
| $61.99 | -11.5% | -$92.50 |
| $77.49 | +10.6% | -$92.50 |
| $92.99 | +32.7% | -$92.50 |
| $108.48 | +54.8% | -$92.50 |
| $123.98 | +76.9% | -$92.50 |
| $139.48 | +99.0% | -$92.50 |
When traders use butterfly on MAGS
Butterflies on MAGS are pinning bets - traders use them when they expect MAGS 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.
MAGS thesis for this butterfly
The market-implied 1-standard-deviation range for MAGS extends from approximately $64.70 on the downside to $75.48 on the upside. A MAGS long call butterfly is a pinning play: it pays maximum at the middle strike if MAGS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MAGS IV rank near 59.30% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on MAGS should anchor more to the directional view and the expected-move geometry. As a Financial Services name, MAGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MAGS-specific events.
MAGS 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. MAGS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MAGS alongside the broader basket even when MAGS-specific fundamentals are unchanged. Always rebuild the position from current MAGS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MAGS?
- A butterfly on MAGS is the butterfly strategy applied to MAGS (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 MAGS etf trading near $70.09, the strikes shown on this page are snapped to the nearest listed MAGS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MAGS 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 MAGS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.80%), the computed maximum profit is $231.78 per contract and the computed maximum loss is -$92.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MAGS butterfly?
- The breakeven for the MAGS butterfly priced on this page is roughly $67.43 and $72.58 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 MAGS market-implied 1-standard-deviation expected move is approximately 7.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MAGS?
- Butterflies on MAGS are pinning bets - traders use them when they expect MAGS 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 MAGS implied volatility affect this butterfly?
- MAGS ATM IV is at 26.80% with IV rank near 59.30%, 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.