PST Butterfly Strategy
PST (ProShares UltraShort 7-10 Year Treasury), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the Daily Target. The index includes publicly-issued U.S. Treasury securities that have a remaining maturity greater than or equal to seven years and less than or equal to ten years and have $300 million or more of outstanding face value, excluding amounts held by the Federal Reserve. The fund is non-diversified.
PST (ProShares UltraShort 7-10 Year Treasury) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $11.4M, a beta of -2.35 versus the broader market, a 52-week range of 21.39-23.62, average daily share volume of 9K, a public-listing history dating back to 2008. These structural characteristics shape how PST etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -2.35 indicates PST has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PST?
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 PST snapshot
As of June 30, 2026, spot at $22.73, ATM IV 4.00%, IV rank 0.62%, expected move 1.15%. The butterfly on PST 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 17-day expiry.
Why this butterfly structure on PST specifically: PST IV at 4.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a PST butterfly, with a market-implied 1-standard-deviation move of approximately 1.15% (roughly $0.26 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PST expiries trade a higher absolute premium for lower per-day decay. Position sizing on PST should anchor to the underlying notional of $22.73 per share and to the trader's directional view on PST etf.
PST butterfly setup
The PST 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 PST near $22.73, the first option leg uses a $21.59 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PST chain at a 17-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 PST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $21.59 | N/A |
| Sell 2 | Call | $22.73 | N/A |
| Buy 1 | Call | $23.87 | N/A |
PST 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.
PST butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PST. 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 PST
Butterflies on PST are pinning bets - traders use them when they expect PST 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.
PST thesis for this butterfly
The market-implied 1-standard-deviation range for PST extends from approximately $22.47 on the downside to $22.99 on the upside. A PST long call butterfly is a pinning play: it pays maximum at the middle strike if PST settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PST IV rank near 0.62% 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 PST at 4.00%. As a Financial Services name, PST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PST-specific events.
PST 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. PST positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PST alongside the broader basket even when PST-specific fundamentals are unchanged. Always rebuild the position from current PST chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PST?
- A butterfly on PST is the butterfly strategy applied to PST (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 PST etf trading near $22.73, the strikes shown on this page are snapped to the nearest listed PST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PST 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 PST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 4.00%), 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 PST butterfly?
- The breakeven for the PST 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 PST market-implied 1-standard-deviation expected move is approximately 1.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PST?
- Butterflies on PST are pinning bets - traders use them when they expect PST 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 PST implied volatility affect this butterfly?
- PST ATM IV is at 4.00% with IV rank near 0.62%, 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.