SCHG Butterfly Strategy
SCHG (Schwab U.S. Large-Cap Growth ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Schwab U.S. Large-Cap Growth ETF (SCHG) endeavors to faithfully replicate the total investment performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. Its primary objective is to mirror this benchmark's returns with the highest possible accuracy, excluding its own operational costs and management fees.
SCHG (Schwab U.S. Large-Cap Growth ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $61.51B, a beta of 1.19 versus the broader market, a 52-week range of 27.96-35.42, average daily share volume of 13.1M, a public-listing history dating back to 2010. These structural characteristics shape how SCHG etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.19 places SCHG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. SCHG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on SCHG?
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 SCHG snapshot
As of June 29, 2026, spot at $33.47, ATM IV 23.70%, IV rank 67.43%, expected move 6.79%. The butterfly on SCHG 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 SCHG specifically: SCHG IV at 23.70% 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 6.79% (roughly $2.27 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 SCHG expiries trade a higher absolute premium for lower per-day decay. Position sizing on SCHG should anchor to the underlying notional of $33.47 per share and to the trader's directional view on SCHG etf.
SCHG butterfly setup
The SCHG 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 SCHG near $33.47, the first option leg uses a $32.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SCHG 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 SCHG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $32.00 | $1.90 |
| Sell 2 | Call | $33.00 | $1.00 |
| Buy 1 | Call | $35.00 | $0.10 |
SCHG butterfly risk and reward
- Net Premium / Debit
- $0.00
- Max Profit (per contract)
- $97.05
- Max Loss (per contract)
- -$100.00
- Breakeven(s)
- $34.00
- Risk / Reward Ratio
- 0.971
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.
SCHG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SCHG. 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% | $0.00 |
| $7.41 | -77.9% | $0.00 |
| $14.81 | -55.8% | $0.00 |
| $22.21 | -33.6% | $0.00 |
| $29.61 | -11.5% | $0.00 |
| $37.01 | +10.6% | -$100.00 |
| $44.41 | +32.7% | -$100.00 |
| $51.81 | +54.8% | -$100.00 |
| $59.20 | +76.9% | -$100.00 |
| $66.60 | +99.0% | -$100.00 |
When traders use butterfly on SCHG
Butterflies on SCHG are pinning bets - traders use them when they expect SCHG 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.
SCHG thesis for this butterfly
The market-implied 1-standard-deviation range for SCHG extends from approximately $31.20 on the downside to $35.74 on the upside. A SCHG long call butterfly is a pinning play: it pays maximum at the middle strike if SCHG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SCHG IV rank near 67.43% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on SCHG should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SCHG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SCHG-specific events.
SCHG 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. SCHG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SCHG alongside the broader basket even when SCHG-specific fundamentals are unchanged. Always rebuild the position from current SCHG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SCHG?
- A butterfly on SCHG is the butterfly strategy applied to SCHG (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 SCHG etf trading near $33.47, the strikes shown on this page are snapped to the nearest listed SCHG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SCHG 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 SCHG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.70%), the computed maximum profit is $97.05 per contract and the computed maximum loss is -$100.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SCHG butterfly?
- The breakeven for the SCHG butterfly priced on this page is roughly $34.00 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 SCHG market-implied 1-standard-deviation expected move is approximately 6.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SCHG?
- Butterflies on SCHG are pinning bets - traders use them when they expect SCHG 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 SCHG implied volatility affect this butterfly?
- SCHG ATM IV is at 23.70% with IV rank near 67.43%, 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.