SBIO Butterfly Strategy
SBIO (ALPS Medical Breakthroughs ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The ALPS Medical Breakthroughs ETF (SBIO) seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index, the S-Network Medical Breakthroughs Index (PMBI).
SBIO (ALPS Medical Breakthroughs ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $163.0M, a beta of 0.98 versus the broader market, a 52-week range of 27.1-57.77, average daily share volume of 32K, a public-listing history dating back to 2014. These structural characteristics shape how SBIO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.98 places SBIO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. SBIO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on SBIO?
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 SBIO snapshot
As of May 15, 2026, spot at $53.55, ATM IV 31.60%, IV rank 35.02%, expected move 9.06%. The butterfly on SBIO 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 SBIO specifically: SBIO IV at 31.60% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 9.06% (roughly $4.85 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 SBIO expiries trade a higher absolute premium for lower per-day decay. Position sizing on SBIO should anchor to the underlying notional of $53.55 per share and to the trader's directional view on SBIO etf.
SBIO butterfly setup
The SBIO 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 SBIO near $53.55, the first option leg uses a $51.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SBIO 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 SBIO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $51.00 | $3.95 |
| Sell 2 | Call | $54.00 | $2.25 |
| Buy 1 | Call | $56.00 | $1.38 |
SBIO butterfly risk and reward
- Net Premium / Debit
- -$83.00
- Max Profit (per contract)
- $199.41
- Max Loss (per contract)
- -$83.00
- Breakeven(s)
- $51.83
- Risk / Reward Ratio
- 2.402
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.
SBIO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SBIO. 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% | -$83.00 |
| $11.85 | -77.9% | -$83.00 |
| $23.69 | -55.8% | -$83.00 |
| $35.53 | -33.7% | -$83.00 |
| $47.37 | -11.5% | -$83.00 |
| $59.21 | +10.6% | +$17.00 |
| $71.04 | +32.7% | +$17.00 |
| $82.88 | +54.8% | +$17.00 |
| $94.72 | +76.9% | +$17.00 |
| $106.56 | +99.0% | +$17.00 |
When traders use butterfly on SBIO
Butterflies on SBIO are pinning bets - traders use them when they expect SBIO 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.
SBIO thesis for this butterfly
The market-implied 1-standard-deviation range for SBIO extends from approximately $48.70 on the downside to $58.40 on the upside. A SBIO long call butterfly is a pinning play: it pays maximum at the middle strike if SBIO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SBIO IV rank near 35.02% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on SBIO should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SBIO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SBIO-specific events.
SBIO 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. SBIO positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SBIO alongside the broader basket even when SBIO-specific fundamentals are unchanged. Always rebuild the position from current SBIO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SBIO?
- A butterfly on SBIO is the butterfly strategy applied to SBIO (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 SBIO etf trading near $53.55, the strikes shown on this page are snapped to the nearest listed SBIO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SBIO 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 SBIO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $199.41 per contract and the computed maximum loss is -$83.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SBIO butterfly?
- The breakeven for the SBIO butterfly priced on this page is roughly $51.83 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 SBIO market-implied 1-standard-deviation expected move is approximately 9.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SBIO?
- Butterflies on SBIO are pinning bets - traders use them when they expect SBIO 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 SBIO implied volatility affect this butterfly?
- SBIO ATM IV is at 31.60% with IV rank near 35.02%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.