TMFC Butterfly Strategy
TMFC (Motley Fool 100 Index ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
Under typical market conditions, at least 80% of the fund's total holdings (excluding any collateral originating from securities lending activities) will be allocated to the underlying index's component stocks. Established by TMF in 2017, this proprietary and rules-based index is engineered to mirror the financial trajectory of the 100 largest and most liquid U.S. enterprises, specifically those chosen based on recommendations issued by TMF’s analysts and newsletters. It's important to note that the fund itself is considered non-diversified.
TMFC (Motley Fool 100 Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.08B, a beta of 1.14 versus the broader market, a 52-week range of 63.76-80.77, average daily share volume of 87K, a public-listing history dating back to 2018. These structural characteristics shape how TMFC etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.14 places TMFC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TMFC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TMFC?
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.
TMFC snapshot
As of August 14, 2026, spot at $80.15, ATM IV 18.70%, IV rank 1.64%, expected move 5.36%. The butterfly on TMFC 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 35-day expiry.
Why this butterfly structure on TMFC specifically: TMFC IV at 18.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a TMFC butterfly, with a market-implied 1-standard-deviation move of approximately 5.36% (roughly $4.30 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TMFC expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMFC should anchor to the underlying notional of $80.15 per share and to the trader's directional view on TMFC etf.
TMFC butterfly setup
The TMFC 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 TMFC at $80.15 on that close, the first option leg uses a $76.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMFC chain at a 35-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 TMFC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $76.00 | $5.15 |
| Sell 2 | Call | $80.00 | $2.28 |
| Buy 1 | Call | $85.00 | $0.41 |
TMFC butterfly risk and reward
- Net Premium / Debit
- -$101.00
- Max Profit (per contract)
- $274.23
- Max Loss (per contract)
- -$201.00
- Breakeven(s)
- $77.01, $82.99
- Risk / Reward Ratio
- 1.364
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.
TMFC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TMFC. 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% | -$101.00 |
| $17.73 | -77.9% | -$101.00 |
| $35.45 | -55.8% | -$101.00 |
| $53.17 | -33.7% | -$101.00 |
| $70.89 | -11.6% | -$101.00 |
| $88.61 | +10.6% | -$201.00 |
| $106.33 | +32.7% | -$201.00 |
| $124.05 | +54.8% | -$201.00 |
| $141.77 | +76.9% | -$201.00 |
| $159.49 | +99.0% | -$201.00 |
When traders use butterfly on TMFC
Butterflies on TMFC are pinning bets - traders use them when they expect TMFC 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.
TMFC thesis for this butterfly
The market-implied 1-standard-deviation range for TMFC extends from approximately $75.85 on the downside to $84.45 on the upside. A TMFC long call butterfly is a pinning play: it pays maximum at the middle strike if TMFC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TMFC IV rank near 1.64% 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 TMFC at 18.70%. As a Financial Services name, TMFC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMFC-specific events.
TMFC 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. TMFC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TMFC alongside the broader basket even when TMFC-specific fundamentals are unchanged. Always rebuild the position from current TMFC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TMFC?
- A butterfly on TMFC is the butterfly strategy applied to TMFC (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 TMFC etf at $80.15 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed TMFC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are TMFC 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 TMFC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 18.70%), the computed maximum profit is $274.23 per contract and the computed maximum loss is -$201.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TMFC butterfly?
- The breakeven for the TMFC butterfly priced on this page is roughly $77.01 and $82.99 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 TMFC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TMFC?
- Butterflies on TMFC are pinning bets - traders use them when they expect TMFC 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 TMFC implied volatility affect this butterfly?
- TMFC ATM IV is at 18.70% with IV rank near 1.64%, 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.