TMV Butterfly Strategy
TMV (Direxion Daily 20+ Year Treasury Bear 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Direxion Daily 20+ Year Treasury Bull & Bear 3X ETFs seek daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the ICE U.S. Treasury 20+ Year Bond Index. There is no guarantee the funds will achieve their stated investment objectives.
TMV (Direxion Daily 20+ Year Treasury Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $181.8M, a beta of -6.87 versus the broader market, a 52-week range of 31.82-44.3, average daily share volume of 810K, a public-listing history dating back to 2009. These structural characteristics shape how TMV etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -6.87 indicates TMV has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TMV pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TMV?
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 TMV snapshot
As of May 15, 2026, spot at $41.23, ATM IV 33.30%, IV rank 32.65%, expected move 9.55%. The butterfly on TMV 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 TMV specifically: TMV IV at 33.30% 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 9.55% (roughly $3.94 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 TMV expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMV should anchor to the underlying notional of $41.23 per share and to the trader's directional view on TMV etf.
TMV butterfly setup
The TMV 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 TMV near $41.23, the first option leg uses a $39.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMV 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 TMV shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $39.00 | $2.93 |
| Sell 2 | Call | $41.00 | $1.83 |
| Buy 1 | Call | $43.00 | $1.05 |
TMV butterfly risk and reward
- Net Premium / Debit
- -$32.50
- Max Profit (per contract)
- $164.72
- Max Loss (per contract)
- -$32.50
- Breakeven(s)
- $39.32, $42.68
- Risk / Reward Ratio
- 5.068
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.
TMV butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TMV. 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% | -$32.50 |
| $9.13 | -77.9% | -$32.50 |
| $18.24 | -55.8% | -$32.50 |
| $27.36 | -33.7% | -$32.50 |
| $36.47 | -11.5% | -$32.50 |
| $45.59 | +10.6% | -$32.50 |
| $54.70 | +32.7% | -$32.50 |
| $63.82 | +54.8% | -$32.50 |
| $72.93 | +76.9% | -$32.50 |
| $82.05 | +99.0% | -$32.50 |
When traders use butterfly on TMV
Butterflies on TMV are pinning bets - traders use them when they expect TMV 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.
TMV thesis for this butterfly
The market-implied 1-standard-deviation range for TMV extends from approximately $37.29 on the downside to $45.17 on the upside. A TMV long call butterfly is a pinning play: it pays maximum at the middle strike if TMV settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TMV IV rank near 32.65% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on TMV should anchor more to the directional view and the expected-move geometry. As a Financial Services name, TMV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMV-specific events.
TMV 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. TMV positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TMV alongside the broader basket even when TMV-specific fundamentals are unchanged. Always rebuild the position from current TMV chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TMV?
- A butterfly on TMV is the butterfly strategy applied to TMV (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 TMV etf trading near $41.23, the strikes shown on this page are snapped to the nearest listed TMV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TMV 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 TMV butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.30%), the computed maximum profit is $164.72 per contract and the computed maximum loss is -$32.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TMV butterfly?
- The breakeven for the TMV butterfly priced on this page is roughly $39.32 and $42.68 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 TMV market-implied 1-standard-deviation expected move is approximately 9.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TMV?
- Butterflies on TMV are pinning bets - traders use them when they expect TMV 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 TMV implied volatility affect this butterfly?
- TMV ATM IV is at 33.30% with IV rank near 32.65%, 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.