How are PFI 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 PFI butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.20%), the computed maximum profit is $194.46 per contract and the computed maximum loss is -$96.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PFI butterfly?

The breakeven for the PFI butterfly priced on this page is roughly $61.96 and $66.04 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The PFI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 4.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PFI implied volatility affect this butterfly?

PFI ATM IV is at 17.20% with IV rank near 0.11%, 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.

PFI Butterfly Strategy

PFI (Invesco Dorsey Wright Financial Momentum ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.

PFI changed its tune in February 2014 but continues to provide an alternate take on US financial firms. The old version of the fund used a multi-factor selection method coupled with a tiered equal-weighting scheme that produced a vastly different portfolio than our neutral benchmark. The new incarnation follows a Dorsey-Wright relative strength index that selects and weights stocks by price momentum. Index selection begins by creating a momentum score for each eligible stock in the financial sector. The score is based on both intermediate and long-term price movements compared to other stocks in the space. The top, at least 30 stocks, with the highest momentum scores are selected for index inclusion.

PFI (Invesco Dorsey Wright Financial Momentum ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $63.4M, a beta of 1.02 versus the broader market, a 52-week range of 51.57-64.46, average daily share volume of 9K, a public-listing history dating back to 2006, approximately 321 full-time employees. These structural characteristics shape how PFI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.02 places PFI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PFI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on PFI?

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.

PFI snapshot

As of August 14, 2026, spot at $63.77, ATM IV 17.20%, IV rank 0.11%, expected move 4.93%. The butterfly on PFI below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this butterfly structure on PFI specifically: PFI IV at 17.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a PFI butterfly, with a market-implied 1-standard-deviation move of approximately 4.93% (roughly $3.14 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PFI expiries trade a higher absolute premium for lower per-day decay. Position sizing on PFI should anchor to the underlying notional of $63.77 per share and to the trader's directional view on PFI etf.

PFI butterfly setup

The PFI butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PFI at $63.77 on that close, the first option leg uses a $61.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PFI chain at a 35-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 PFI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$61.00	$3.35
Sell 2	Call	$64.00	$1.38
Buy 1	Call	$67.00	$0.37

PFI butterfly risk and reward

Net Premium / Debit: -$96.00
Max Profit (per contract): $194.46
Max Loss (per contract): -$96.00
Breakeven(s): $61.96, $66.04
Risk / Reward Ratio: 2.026

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.

PFI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on PFI. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$96.00
$14.11	-77.9%	-$96.00
$28.21	-55.8%	-$96.00
$42.31	-33.7%	-$96.00
$56.41	-11.5%	-$96.00
$70.50	+10.6%	-$96.00
$84.60	+32.7%	-$96.00
$98.70	+54.8%	-$96.00
$112.80	+76.9%	-$96.00
$126.90	+99.0%	-$96.00

When traders use butterfly on PFI

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

PFI thesis for this butterfly

The market-implied 1-standard-deviation range for PFI extends from approximately $60.63 on the downside to $66.91 on the upside. A PFI long call butterfly is a pinning play: it pays maximum at the middle strike if PFI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PFI IV rank near 0.11% 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 PFI at 17.20%. As a Financial Services name, PFI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PFI-specific events.

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

Frequently asked questions

What is a butterfly on PFI?: A butterfly on PFI is the butterfly strategy applied to PFI (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 PFI etf at $63.77 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed PFI chain strike and the premiums come straight from that session's bid/ask midpoint.
How are PFI 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 PFI butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.20%), the computed maximum profit is $194.46 per contract and the computed maximum loss is -$96.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PFI butterfly?: The breakeven for the PFI butterfly priced on this page is roughly $61.96 and $66.04 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The PFI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 4.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on PFI?: Butterflies on PFI are pinning bets - traders use them when they expect PFI 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 PFI implied volatility affect this butterfly?: PFI ATM IV is at 17.20% with IV rank near 0.11%, 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.