TXS Butterfly Strategy
TXS (Texas Capital Texas Equity Index ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
TXS tracks an index composed of companies that have significant contributions to the economy of Texas. The fund adviser believes that companies headquartered in Texas enjoy certain economic, regulatory, taxation, workforce and other benefits relative to companies headquartered in other states. Initially, all eligible securities from the investable equity universe that meet certain size and liquidity requirements are selected as index constituents. Component sectors in the index are weighted based on their industry contributions to Texass GDP, as reported for the private sector by the US Bureau of Economic Analysis. Companies within each sector are then weighted based on their market-cap, with a minimum cap of 0.05% and maximum cap of 10% per constituent. The fund does not limit its investment to a certain market-cap bracket.
TXS (Texas Capital Texas Equity Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $34.1M, a beta of 0.91 versus the broader market, a 52-week range of 32.89-39.78, average daily share volume of 3K, a public-listing history dating back to 2023. These structural characteristics shape how TXS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.91 places TXS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TXS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TXS?
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 TXS snapshot
As of May 15, 2026, spot at $39.41, ATM IV 54.80%, expected move 15.71%. The butterfly on TXS 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 TXS specifically: IV rank is unavailable in the current snapshot, so regime-based timing for TXS is inferred from ATM IV at 54.80% alone, with a market-implied 1-standard-deviation move of approximately 15.71% (roughly $6.19 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 TXS expiries trade a higher absolute premium for lower per-day decay. Position sizing on TXS should anchor to the underlying notional of $39.41 per share and to the trader's directional view on TXS etf.
TXS butterfly setup
The TXS 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 TXS near $39.41, the first option leg uses a $37.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TXS 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 TXS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $37.00 | $4.04 |
| Sell 2 | Call | $39.00 | $2.91 |
| Buy 1 | Call | $41.00 | $2.02 |
TXS butterfly risk and reward
- Net Premium / Debit
- -$24.00
- Max Profit (per contract)
- $158.10
- Max Loss (per contract)
- -$24.00
- Breakeven(s)
- $37.24, $40.76
- Risk / Reward Ratio
- 6.587
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.
TXS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TXS. 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% | -$24.00 |
| $8.72 | -77.9% | -$24.00 |
| $17.44 | -55.8% | -$24.00 |
| $26.15 | -33.7% | -$24.00 |
| $34.86 | -11.5% | -$24.00 |
| $43.57 | +10.6% | -$24.00 |
| $52.29 | +32.7% | -$24.00 |
| $61.00 | +54.8% | -$24.00 |
| $69.71 | +76.9% | -$24.00 |
| $78.42 | +99.0% | -$24.00 |
When traders use butterfly on TXS
Butterflies on TXS are pinning bets - traders use them when they expect TXS 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.
TXS thesis for this butterfly
The market-implied 1-standard-deviation range for TXS extends from approximately $33.22 on the downside to $45.60 on the upside. A TXS long call butterfly is a pinning play: it pays maximum at the middle strike if TXS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Financial Services name, TXS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TXS-specific events.
TXS 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. TXS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TXS alongside the broader basket even when TXS-specific fundamentals are unchanged. Always rebuild the position from current TXS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TXS?
- A butterfly on TXS is the butterfly strategy applied to TXS (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 TXS etf trading near $39.41, the strikes shown on this page are snapped to the nearest listed TXS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TXS 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 TXS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 54.80%), the computed maximum profit is $158.10 per contract and the computed maximum loss is -$24.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TXS butterfly?
- The breakeven for the TXS butterfly priced on this page is roughly $37.24 and $40.76 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 TXS market-implied 1-standard-deviation expected move is approximately 15.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TXS?
- Butterflies on TXS are pinning bets - traders use them when they expect TXS 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 TXS implied volatility affect this butterfly?
- Current TXS ATM IV is 54.80%; IV rank context is unavailable in the current snapshot.