RXL Butterfly Strategy
RXL (ProShares Ultra Health Care), in the Financial Services sector, (Asset Management industry), listed on AMEX.
ProShares Trust - ProShares Ultra Health Care is an exchange traded fund launched and managed by ProShare Advisors LLC. The fund invests in public equity markets of the United States. The fund invests through derivatives in stocks of companies operating across health care equipments, providers, services, technology, biotechnology; pharmaceuticals, and life sciences tools & service sectors. The fund uses derivatives such as swaps to create its portfolio. The fund invests in growth and value stocks of companies across diversified market capitalization. It seeks to track 2x the daily performance of the S&P Health Care Select Sector Index, by using full replication technique.
RXL (ProShares Ultra Health Care) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $83.4M, a beta of 0.86 versus the broader market, a 52-week range of 39.32-59.59, average daily share volume of 11K, a public-listing history dating back to 2007. These structural characteristics shape how RXL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.86 places RXL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RXL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on RXL?
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.
RXL snapshot
As of August 14, 2026, spot at $58.22, ATM IV 28.60%, IV rank 14.32%, expected move 8.20%. The butterfly on RXL 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 7-day expiry.
Why this butterfly structure on RXL specifically: RXL IV at 28.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a RXL butterfly, with a market-implied 1-standard-deviation move of approximately 8.20% (roughly $4.77 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RXL expiries trade a higher absolute premium for lower per-day decay. Position sizing on RXL should anchor to the underlying notional of $58.22 per share and to the trader's directional view on RXL etf.
RXL butterfly setup
The RXL 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 RXL at $58.22 on that close, the first option leg uses a $55.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RXL chain at a 7-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 RXL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $55.00 | $3.23 |
| Sell 2 | Call | $58.00 | $2.08 |
| Buy 1 | Call | $61.00 | $0.92 |
RXL butterfly risk and reward
- Net Premium / Debit
- +$1.50
- Max Profit (per contract)
- $294.75
- Max Loss (per contract)
- $1.50
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- 196.497
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.
RXL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RXL. 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% | +$1.50 |
| $12.88 | -77.9% | +$1.50 |
| $25.75 | -55.8% | +$1.50 |
| $38.62 | -33.7% | +$1.50 |
| $51.50 | -11.5% | +$1.50 |
| $64.37 | +10.6% | +$1.50 |
| $77.24 | +32.7% | +$1.50 |
| $90.11 | +54.8% | +$1.50 |
| $102.98 | +76.9% | +$1.50 |
| $115.85 | +99.0% | +$1.50 |
When traders use butterfly on RXL
Butterflies on RXL are pinning bets - traders use them when they expect RXL 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.
RXL thesis for this butterfly
The market-implied 1-standard-deviation range for RXL extends from approximately $53.45 on the downside to $62.99 on the upside. A RXL long call butterfly is a pinning play: it pays maximum at the middle strike if RXL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RXL IV rank near 14.32% 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 RXL at 28.60%. As a Financial Services name, RXL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RXL-specific events.
RXL 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. RXL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RXL alongside the broader basket even when RXL-specific fundamentals are unchanged. Always rebuild the position from current RXL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RXL?
- A butterfly on RXL is the butterfly strategy applied to RXL (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 RXL etf at $58.22 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed RXL chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are RXL 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 RXL butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 28.60%), the computed maximum profit is $294.75 per contract and the computed maximum loss is $1.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RXL butterfly?
- The breakeven for the RXL butterfly priced on this page is no defined breakeven on the modeled curve 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 RXL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RXL?
- Butterflies on RXL are pinning bets - traders use them when they expect RXL 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 RXL implied volatility affect this butterfly?
- RXL ATM IV is at 28.60% with IV rank near 14.32%, 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.