PSIL Butterfly Strategy
PSIL (AdvisorShares Psychedelics ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund is an actively managed ETF that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies that derive at least 50% of their net revenue from or devote 50% of their assets to psychedelic drugs and derivatives that have economic characteristics similar to such securities. The fund primarily invests in publicly listed life sciences companies focused on psychedelic medicines as well as other companies with activities in the psychedelics business. The fund is non-diversified.
PSIL (AdvisorShares Psychedelics ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $20.8M, a beta of 0.60 versus the broader market, a 52-week range of 11.52-22.49, average daily share volume of 32K, a public-listing history dating back to 2021. These structural characteristics shape how PSIL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.60 indicates PSIL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PSIL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PSIL?
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 PSIL snapshot
As of May 15, 2026, spot at $19.97, ATM IV 52.50%, IV rank 6.05%, expected move 15.05%. The butterfly on PSIL 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 PSIL specifically: PSIL IV at 52.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a PSIL butterfly, with a market-implied 1-standard-deviation move of approximately 15.05% (roughly $3.01 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 PSIL expiries trade a higher absolute premium for lower per-day decay. Position sizing on PSIL should anchor to the underlying notional of $19.97 per share and to the trader's directional view on PSIL etf.
PSIL butterfly setup
The PSIL 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 PSIL near $19.97, the first option leg uses a $19.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PSIL 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 PSIL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $19.00 | $1.73 |
| Sell 2 | Call | $20.00 | $1.23 |
| Buy 1 | Call | $21.00 | $1.00 |
PSIL butterfly risk and reward
- Net Premium / Debit
- -$27.50
- Max Profit (per contract)
- $64.97
- Max Loss (per contract)
- -$27.50
- Breakeven(s)
- $19.28, $20.73
- Risk / Reward Ratio
- 2.362
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.
PSIL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PSIL. 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% | -$27.50 |
| $4.42 | -77.8% | -$27.50 |
| $8.84 | -55.7% | -$27.50 |
| $13.25 | -33.6% | -$27.50 |
| $17.67 | -11.5% | -$27.50 |
| $22.08 | +10.6% | -$27.50 |
| $26.50 | +32.7% | -$27.50 |
| $30.91 | +54.8% | -$27.50 |
| $35.32 | +76.9% | -$27.50 |
| $39.74 | +99.0% | -$27.50 |
When traders use butterfly on PSIL
Butterflies on PSIL are pinning bets - traders use them when they expect PSIL 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.
PSIL thesis for this butterfly
The market-implied 1-standard-deviation range for PSIL extends from approximately $16.96 on the downside to $22.98 on the upside. A PSIL long call butterfly is a pinning play: it pays maximum at the middle strike if PSIL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PSIL IV rank near 6.05% 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 PSIL at 52.50%. As a Financial Services name, PSIL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PSIL-specific events.
PSIL 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. PSIL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PSIL alongside the broader basket even when PSIL-specific fundamentals are unchanged. Always rebuild the position from current PSIL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PSIL?
- A butterfly on PSIL is the butterfly strategy applied to PSIL (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 PSIL etf trading near $19.97, the strikes shown on this page are snapped to the nearest listed PSIL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PSIL 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 PSIL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 52.50%), the computed maximum profit is $64.97 per contract and the computed maximum loss is -$27.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PSIL butterfly?
- The breakeven for the PSIL butterfly priced on this page is roughly $19.28 and $20.73 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 PSIL market-implied 1-standard-deviation expected move is approximately 15.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PSIL?
- Butterflies on PSIL are pinning bets - traders use them when they expect PSIL 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 PSIL implied volatility affect this butterfly?
- PSIL ATM IV is at 52.50% with IV rank near 6.05%, 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.