MSTU Butterfly Strategy
MSTU (T-REX 2X Long MSTR Daily Target ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on CBOE.
This fund aims to provide twice the daily return of MSTR (MicroStrategy Inc.) through investments in swap agreements. Under typical market conditions, at least 80% of its total assets, including any borrowed capital, will be dedicated to these agreements. MicroStrategy Inc. is known for developing enterprise analytics and mobility software. Investors should note that this fund is non-diversified.
MSTU (T-REX 2X Long MSTR Daily Target ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $30.4M, a beta of 4.01 versus the broader market, a 52-week range of 1.46-107.6, average daily share volume of 41.5M, a public-listing history dating back to 2024. These structural characteristics shape how MSTU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 4.01 indicates MSTU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on MSTU?
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 MSTU snapshot
As of June 29, 2026, spot at $1.88, ATM IV 176.22%, IV rank 50.09%, expected move 50.52%. The butterfly on MSTU 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 MSTU specifically: MSTU IV at 176.22% 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 50.52% (roughly $0.95 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 MSTU expiries trade a higher absolute premium for lower per-day decay. Position sizing on MSTU should anchor to the underlying notional of $1.88 per share and to the trader's directional view on MSTU etf.
MSTU butterfly setup
The MSTU 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 MSTU near $1.88, the first option leg uses a $1.79 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MSTU 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 MSTU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.79 | N/A |
| Sell 2 | Call | $1.88 | N/A |
| Buy 1 | Call | $1.97 | N/A |
MSTU butterfly risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
MSTU butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MSTU. 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.
When traders use butterfly on MSTU
Butterflies on MSTU are pinning bets - traders use them when they expect MSTU 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.
MSTU thesis for this butterfly
The market-implied 1-standard-deviation range for MSTU extends from approximately $0.93 on the downside to $2.83 on the upside. A MSTU long call butterfly is a pinning play: it pays maximum at the middle strike if MSTU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MSTU IV rank near 50.09% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on MSTU should anchor more to the directional view and the expected-move geometry. As a Financial Services name, MSTU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MSTU-specific events.
MSTU 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. MSTU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MSTU alongside the broader basket even when MSTU-specific fundamentals are unchanged. Always rebuild the position from current MSTU chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MSTU?
- A butterfly on MSTU is the butterfly strategy applied to MSTU (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 MSTU etf trading near $1.88, the strikes shown on this page are snapped to the nearest listed MSTU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MSTU 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 MSTU butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 176.22%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MSTU butterfly?
- The breakeven for the MSTU butterfly priced on this page is no defined breakeven on the modeled curve 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 MSTU market-implied 1-standard-deviation expected move is approximately 50.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MSTU?
- Butterflies on MSTU are pinning bets - traders use them when they expect MSTU 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 MSTU implied volatility affect this butterfly?
- MSTU ATM IV is at 176.22% with IV rank near 50.09%, 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.