How are PBE 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 PBE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.00%), the computed maximum profit is $252.79 per contract and the computed maximum loss is -$109.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PBE butterfly?

The breakeven for the PBE butterfly priced on this page is roughly $78.09 and $83.91 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 PBE market-implied 1-standard-deviation expected move is approximately 6.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PBE implied volatility affect this butterfly?

PBE ATM IV is at 24.00% with IV rank near 31.83%, 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.

PBE Butterfly Strategy

PBE (Invesco Biotechnology & Genome ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco Biotechnology & Genome ETF (Fund) is based on the Dynamic Biotech & Genome Intellidex Index (Index). The Fund will normally invest at least 90% of its total assets in the securities that comprise the Index. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value. The Index is comprised of securities of 30 US biotechnology and genome companies. These are companies that are principally engaged in the research, development, manufacture and marketing and distribution of various biotechnological products, services and processes and companies that benefit significantly from scientific and technological advances in biotechnology and genetic engineering and research. The Fund and the Index are rebalanced and reconstituted quarterly in February, May, August and November.

PBE (Invesco Biotechnology & Genome ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $247.8M, a beta of 0.81 versus the broader market, a 52-week range of 59.75-85.73, average daily share volume of 7K, a public-listing history dating back to 2005. These structural characteristics shape how PBE etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.81 places PBE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PBE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on PBE?

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 PBE snapshot

As of May 15, 2026, spot at $81.02, ATM IV 24.00%, IV rank 31.83%, expected move 6.88%. The butterfly on PBE 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 PBE specifically: PBE IV at 24.00% 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 6.88% (roughly $5.57 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 PBE expiries trade a higher absolute premium for lower per-day decay. Position sizing on PBE should anchor to the underlying notional of $81.02 per share and to the trader's directional view on PBE etf.

PBE butterfly setup

The PBE 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 PBE near $81.02, the first option leg uses a $77.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PBE 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 PBE shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$77.00	$5.00
Sell 2	Call	$81.00	$2.43
Buy 1	Call	$85.00	$0.94

PBE butterfly risk and reward

Net Premium / Debit: -$109.00
Max Profit (per contract): $252.79
Max Loss (per contract): -$109.00
Breakeven(s): $78.09, $83.91
Risk / Reward Ratio: 2.319

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.

PBE butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on PBE. 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%	-$109.00
$17.92	-77.9%	-$109.00
$35.84	-55.8%	-$109.00
$53.75	-33.7%	-$109.00
$71.66	-11.6%	-$109.00
$89.57	+10.6%	-$109.00
$107.49	+32.7%	-$109.00
$125.40	+54.8%	-$109.00
$143.31	+76.9%	-$109.00
$161.23	+99.0%	-$109.00

When traders use butterfly on PBE

Butterflies on PBE are pinning bets - traders use them when they expect PBE 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.

PBE thesis for this butterfly

The market-implied 1-standard-deviation range for PBE extends from approximately $75.45 on the downside to $86.59 on the upside. A PBE long call butterfly is a pinning play: it pays maximum at the middle strike if PBE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PBE IV rank near 31.83% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on PBE should anchor more to the directional view and the expected-move geometry. As a Financial Services name, PBE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PBE-specific events.

PBE 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. PBE positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PBE alongside the broader basket even when PBE-specific fundamentals are unchanged. Always rebuild the position from current PBE chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on PBE?: A butterfly on PBE is the butterfly strategy applied to PBE (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 PBE etf trading near $81.02, the strikes shown on this page are snapped to the nearest listed PBE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PBE 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 PBE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.00%), the computed maximum profit is $252.79 per contract and the computed maximum loss is -$109.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PBE butterfly?: The breakeven for the PBE butterfly priced on this page is roughly $78.09 and $83.91 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 PBE market-implied 1-standard-deviation expected move is approximately 6.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on PBE?: Butterflies on PBE are pinning bets - traders use them when they expect PBE 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 PBE implied volatility affect this butterfly?: PBE ATM IV is at 24.00% with IV rank near 31.83%, 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.