RWK Butterfly Strategy
RWK (Invesco S&P MidCap 400 Revenue ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund generally will invest at least 90% of its total assets in the securities that comprise the index. The index is designed to measure the performance of positive revenue-producing constituent securities of the S&P MidCap 400 ® Index (the “Parent index”). The Parent index is comprised of common stocks of approximately 400 mid-capitalization companies that generally represent the mid-cap universe of the U.S. equity market.
RWK (Invesco S&P MidCap 400 Revenue ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.23B, a beta of 1.10 versus the broader market, a 52-week range of 115.34-148.24, average daily share volume of 18K, a public-listing history dating back to 2008, approximately 106 full-time employees. These structural characteristics shape how RWK etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places RWK roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RWK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on RWK?
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 RWK snapshot
As of June 29, 2026, spot at $145.82, ATM IV 463.00%, IV rank 94.12%, expected move 132.74%. The butterfly on RWK 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 18-day expiry.
Why this butterfly structure on RWK specifically: RWK IV at 463.00% is rich versus its 1-year range, which makes a premium-buying RWK butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 132.74% (roughly $193.56 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RWK expiries trade a higher absolute premium for lower per-day decay. Position sizing on RWK should anchor to the underlying notional of $145.82 per share and to the trader's directional view on RWK etf.
RWK butterfly setup
The RWK 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 RWK near $145.82, the first option leg uses a $140.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RWK chain at a 18-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 RWK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $140.00 | $6.45 |
| Sell 2 | Call | $145.00 | $2.83 |
| Buy 1 | Call | $155.00 | $0.19 |
RWK butterfly risk and reward
- Net Premium / Debit
- -$99.00
- Max Profit (per contract)
- $391.77
- Max Loss (per contract)
- -$599.00
- Breakeven(s)
- $140.99, $149.01
- Risk / Reward Ratio
- 0.654
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.
RWK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RWK. 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% | -$99.00 |
| $32.25 | -77.9% | -$99.00 |
| $64.49 | -55.8% | -$99.00 |
| $96.73 | -33.7% | -$99.00 |
| $128.97 | -11.6% | -$99.00 |
| $161.21 | +10.6% | -$599.00 |
| $193.45 | +32.7% | -$599.00 |
| $225.69 | +54.8% | -$599.00 |
| $257.93 | +76.9% | -$599.00 |
| $290.17 | +99.0% | -$599.00 |
When traders use butterfly on RWK
Butterflies on RWK are pinning bets - traders use them when they expect RWK 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.
RWK thesis for this butterfly
The market-implied 1-standard-deviation range for RWK extends from approximately $-47.74 on the downside to $339.38 on the upside. A RWK long call butterfly is a pinning play: it pays maximum at the middle strike if RWK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RWK IV rank near 94.12% 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 RWK at 463.00%. As a Financial Services name, RWK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RWK-specific events.
RWK 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. RWK positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RWK alongside the broader basket even when RWK-specific fundamentals are unchanged. Always rebuild the position from current RWK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RWK?
- A butterfly on RWK is the butterfly strategy applied to RWK (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 RWK etf trading near $145.82, the strikes shown on this page are snapped to the nearest listed RWK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RWK 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 RWK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 463.00%), the computed maximum profit is $391.77 per contract and the computed maximum loss is -$599.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RWK butterfly?
- The breakeven for the RWK butterfly priced on this page is roughly $140.99 and $149.01 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 RWK market-implied 1-standard-deviation expected move is approximately 132.74%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RWK?
- Butterflies on RWK are pinning bets - traders use them when they expect RWK 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 RWK implied volatility affect this butterfly?
- RWK ATM IV is at 463.00% with IV rank near 94.12%, 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.