MDST Butterfly Strategy
MDST (Westwood Salient Enhanced Midstream Income ETF), in the Financial Services sector, (Asset Management industry), listed on NYSE.
The fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in securities of Midstream North American corporations and Midstream U.S. master limited partnerships (“MLPs”). The fund is non-diversified.
MDST (Westwood Salient Enhanced Midstream Income ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $255.7M, a beta of 0.27 versus the broader market, a 52-week range of 24.93-29.75, average daily share volume of 59K, a public-listing history dating back to 2024. These structural characteristics shape how MDST etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.27 indicates MDST has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MDST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on MDST?
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 MDST snapshot
As of May 15, 2026, spot at $29.80, ATM IV 42.60%, expected move 12.21%. The butterfly on MDST 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 MDST specifically: IV rank is unavailable in the current snapshot, so regime-based timing for MDST is inferred from ATM IV at 42.60% alone, with a market-implied 1-standard-deviation move of approximately 12.21% (roughly $3.64 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 MDST expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDST should anchor to the underlying notional of $29.80 per share and to the trader's directional view on MDST etf.
MDST butterfly setup
The MDST 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 MDST near $29.80, the first option leg uses a $28.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MDST 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 MDST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.00 | $2.63 |
| Sell 2 | Call | $30.00 | $1.50 |
| Buy 1 | Call | $31.00 | $1.09 |
MDST butterfly risk and reward
- Net Premium / Debit
- -$72.00
- Max Profit (per contract)
- $123.47
- Max Loss (per contract)
- -$72.00
- Breakeven(s)
- $28.72
- Risk / Reward Ratio
- 1.715
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.
MDST butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MDST. 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% | -$72.00 |
| $6.60 | -77.9% | -$72.00 |
| $13.19 | -55.8% | -$72.00 |
| $19.77 | -33.6% | -$72.00 |
| $26.36 | -11.5% | -$72.00 |
| $32.95 | +10.6% | +$28.00 |
| $39.54 | +32.7% | +$28.00 |
| $46.12 | +54.8% | +$28.00 |
| $52.71 | +76.9% | +$28.00 |
| $59.30 | +99.0% | +$28.00 |
When traders use butterfly on MDST
Butterflies on MDST are pinning bets - traders use them when they expect MDST 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.
MDST thesis for this butterfly
The market-implied 1-standard-deviation range for MDST extends from approximately $26.16 on the downside to $33.44 on the upside. A MDST long call butterfly is a pinning play: it pays maximum at the middle strike if MDST settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Financial Services name, MDST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDST-specific events.
MDST 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. MDST positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MDST alongside the broader basket even when MDST-specific fundamentals are unchanged. Always rebuild the position from current MDST chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MDST?
- A butterfly on MDST is the butterfly strategy applied to MDST (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 MDST etf trading near $29.80, the strikes shown on this page are snapped to the nearest listed MDST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MDST 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 MDST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 42.60%), the computed maximum profit is $123.47 per contract and the computed maximum loss is -$72.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MDST butterfly?
- The breakeven for the MDST butterfly priced on this page is roughly $28.72 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 MDST market-implied 1-standard-deviation expected move is approximately 12.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MDST?
- Butterflies on MDST are pinning bets - traders use them when they expect MDST 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 MDST implied volatility affect this butterfly?
- Current MDST ATM IV is 42.60%; IV rank context is unavailable in the current snapshot.