MSTZ Butterfly Strategy
MSTZ (T-REX 2X Inverse MSTR Daily Target ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on CBOE.
This fund generally commits a minimum of 80% of its net assets, along with any borrowed capital for investment purposes, into swap agreements. These agreements are structured to provide a daily return that aims to be 200% inverse (twice the opposite) of the performance of MSTR. MSTR refers to MicroStrategy Inc., an enterprise specializing in analytics and mobility software solutions. It's important to note that this fund maintains a non-diversified portfolio.
MSTZ (T-REX 2X Inverse MSTR Daily Target ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $302.8M, a beta of -2.25 versus the broader market, a 52-week range of 3.09-28.71, average daily share volume of 22.8M, a public-listing history dating back to 2024. These structural characteristics shape how MSTZ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -2.25 indicates MSTZ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on MSTZ?
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 MSTZ snapshot
As of June 30, 2026, spot at $15.54, ATM IV 202.64%, IV rank 82.69%, expected move 58.09%. The butterfly on MSTZ 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 31-day expiry.
Why this butterfly structure on MSTZ specifically: MSTZ IV at 202.64% is rich versus its 1-year range, which makes a premium-buying MSTZ butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 58.09% (roughly $9.03 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MSTZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on MSTZ should anchor to the underlying notional of $15.54 per share and to the trader's directional view on MSTZ etf.
MSTZ butterfly setup
The MSTZ 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 MSTZ near $15.54, the first option leg uses a $15.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MSTZ chain at a 31-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 MSTZ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $15.00 | $3.73 |
| Sell 2 | Call | $16.00 | $3.38 |
| Buy 1 | Call | $16.00 | $3.38 |
MSTZ butterfly risk and reward
- Net Premium / Debit
- -$35.00
- Max Profit (per contract)
- $65.00
- Max Loss (per contract)
- -$35.00
- Breakeven(s)
- $15.35
- Risk / Reward Ratio
- 1.857
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.
MSTZ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MSTZ. 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 | -99.9% | -$35.00 |
| $3.44 | -77.8% | -$35.00 |
| $6.88 | -55.7% | -$35.00 |
| $10.31 | -33.6% | -$35.00 |
| $13.75 | -11.5% | -$35.00 |
| $17.18 | +10.6% | +$65.00 |
| $20.62 | +32.7% | +$65.00 |
| $24.05 | +54.8% | +$65.00 |
| $27.49 | +76.9% | +$65.00 |
| $30.92 | +99.0% | +$65.00 |
When traders use butterfly on MSTZ
Butterflies on MSTZ are pinning bets - traders use them when they expect MSTZ 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.
MSTZ thesis for this butterfly
The market-implied 1-standard-deviation range for MSTZ extends from approximately $6.51 on the downside to $24.57 on the upside. A MSTZ long call butterfly is a pinning play: it pays maximum at the middle strike if MSTZ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MSTZ IV rank near 82.69% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MSTZ at 202.64%. As a Financial Services name, MSTZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MSTZ-specific events.
MSTZ 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. MSTZ positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MSTZ alongside the broader basket even when MSTZ-specific fundamentals are unchanged. Always rebuild the position from current MSTZ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MSTZ?
- A butterfly on MSTZ is the butterfly strategy applied to MSTZ (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 MSTZ etf trading near $15.54, the strikes shown on this page are snapped to the nearest listed MSTZ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MSTZ 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 MSTZ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 202.64%), the computed maximum profit is $65.00 per contract and the computed maximum loss is -$35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MSTZ butterfly?
- The breakeven for the MSTZ butterfly priced on this page is roughly $15.35 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 MSTZ market-implied 1-standard-deviation expected move is approximately 58.09%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MSTZ?
- Butterflies on MSTZ are pinning bets - traders use them when they expect MSTZ 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 MSTZ implied volatility affect this butterfly?
- MSTZ ATM IV is at 202.64% with IV rank near 82.69%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.