MEMX Butterfly Strategy
MEMX (Matthews Emerging Markets ex China Active ETF MEMX), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Under normal circumstances, the fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in emerging market countries excluding China. The fund may also invest in companies located in developed countries or China; however, the fund may not invest in any company located in a developed country or China if, at the time of purchase, more than 20% of the fund’s assets are invested in a combination of developed market and Chinese companies.
MEMX (Matthews Emerging Markets ex China Active ETF MEMX) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $45.0M, a beta of 1.10 versus the broader market, a 52-week range of 30.281-48.265, average daily share volume of 4K, a public-listing history dating back to 2023. These structural characteristics shape how MEMX etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places MEMX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MEMX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on MEMX?
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 MEMX snapshot
As of May 15, 2026, spot at $46.10, ATM IV 33.20%, IV rank 13.48%, expected move 9.52%. The butterfly on MEMX 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 MEMX specifically: MEMX IV at 33.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a MEMX butterfly, with a market-implied 1-standard-deviation move of approximately 9.52% (roughly $4.39 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 MEMX expiries trade a higher absolute premium for lower per-day decay. Position sizing on MEMX should anchor to the underlying notional of $46.10 per share and to the trader's directional view on MEMX etf.
MEMX butterfly setup
The MEMX 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 MEMX near $46.10, the first option leg uses a $44.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MEMX 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 MEMX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $44.00 | $3.08 |
| Sell 2 | Call | $46.00 | $2.00 |
| Buy 1 | Call | $48.00 | $1.16 |
MEMX butterfly risk and reward
- Net Premium / Debit
- -$23.50
- Max Profit (per contract)
- $163.84
- Max Loss (per contract)
- -$23.50
- Breakeven(s)
- $44.24, $47.79
- Risk / Reward Ratio
- 6.972
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.
MEMX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MEMX. 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% | -$23.50 |
| $10.20 | -77.9% | -$23.50 |
| $20.39 | -55.8% | -$23.50 |
| $30.59 | -33.7% | -$23.50 |
| $40.78 | -11.5% | -$23.50 |
| $50.97 | +10.6% | -$23.50 |
| $61.16 | +32.7% | -$23.50 |
| $71.35 | +54.8% | -$23.50 |
| $81.54 | +76.9% | -$23.50 |
| $91.74 | +99.0% | -$23.50 |
When traders use butterfly on MEMX
Butterflies on MEMX are pinning bets - traders use them when they expect MEMX 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.
MEMX thesis for this butterfly
The market-implied 1-standard-deviation range for MEMX extends from approximately $41.71 on the downside to $50.49 on the upside. A MEMX long call butterfly is a pinning play: it pays maximum at the middle strike if MEMX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MEMX IV rank near 13.48% 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 MEMX at 33.20%. As a Financial Services name, MEMX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MEMX-specific events.
MEMX 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. MEMX positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MEMX alongside the broader basket even when MEMX-specific fundamentals are unchanged. Always rebuild the position from current MEMX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MEMX?
- A butterfly on MEMX is the butterfly strategy applied to MEMX (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 MEMX etf trading near $46.10, the strikes shown on this page are snapped to the nearest listed MEMX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MEMX 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 MEMX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.20%), the computed maximum profit is $163.84 per contract and the computed maximum loss is -$23.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MEMX butterfly?
- The breakeven for the MEMX butterfly priced on this page is roughly $44.24 and $47.79 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 MEMX market-implied 1-standard-deviation expected move is approximately 9.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MEMX?
- Butterflies on MEMX are pinning bets - traders use them when they expect MEMX 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 MEMX implied volatility affect this butterfly?
- MEMX ATM IV is at 33.20% with IV rank near 13.48%, 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.