VPL Butterfly Strategy
VPL (Vanguard FTSE Pacific ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Seeks to track the performance of the FTSE Developed Asia Pacific All Cap Index, which measures the investment return of stocks issued by companies located in the major markets of the Pacific region. Holds stocks of companies located in Japan (the major index component), Australia, Hong Kong, New Zealand, and Singapore. Follows a passively managed, full-replication approach.
VPL (Vanguard FTSE Pacific ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $12.02B, a beta of 1.06 versus the broader market, a 52-week range of 76.84-114.75, average daily share volume of 1.8M, a public-listing history dating back to 2005. These structural characteristics shape how VPL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.06 places VPL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. VPL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on VPL?
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 VPL snapshot
As of May 15, 2026, spot at $111.09, ATM IV 26.30%, IV rank 28.29%, expected move 7.54%. The butterfly on VPL 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 VPL specifically: VPL IV at 26.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a VPL butterfly, with a market-implied 1-standard-deviation move of approximately 7.54% (roughly $8.38 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 VPL expiries trade a higher absolute premium for lower per-day decay. Position sizing on VPL should anchor to the underlying notional of $111.09 per share and to the trader's directional view on VPL etf.
VPL butterfly setup
The VPL 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 VPL near $111.09, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VPL 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 VPL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $105.00 | $7.20 |
| Sell 2 | Call | $110.00 | $3.85 |
| Buy 1 | Call | $115.00 | $1.48 |
VPL butterfly risk and reward
- Net Premium / Debit
- -$97.50
- Max Profit (per contract)
- $348.82
- Max Loss (per contract)
- -$97.50
- Breakeven(s)
- $105.97, $114.03
- Risk / Reward Ratio
- 3.578
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.
VPL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on VPL. 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% | -$97.50 |
| $24.57 | -77.9% | -$97.50 |
| $49.13 | -55.8% | -$97.50 |
| $73.69 | -33.7% | -$97.50 |
| $98.26 | -11.6% | -$97.50 |
| $122.82 | +10.6% | -$97.50 |
| $147.38 | +32.7% | -$97.50 |
| $171.94 | +54.8% | -$97.50 |
| $196.50 | +76.9% | -$97.50 |
| $221.06 | +99.0% | -$97.50 |
When traders use butterfly on VPL
Butterflies on VPL are pinning bets - traders use them when they expect VPL 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.
VPL thesis for this butterfly
The market-implied 1-standard-deviation range for VPL extends from approximately $102.71 on the downside to $119.47 on the upside. A VPL long call butterfly is a pinning play: it pays maximum at the middle strike if VPL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current VPL IV rank near 28.29% 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 VPL at 26.30%. As a Financial Services name, VPL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VPL-specific events.
VPL 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. VPL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VPL alongside the broader basket even when VPL-specific fundamentals are unchanged. Always rebuild the position from current VPL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on VPL?
- A butterfly on VPL is the butterfly strategy applied to VPL (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 VPL etf trading near $111.09, the strikes shown on this page are snapped to the nearest listed VPL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are VPL 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 VPL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.30%), the computed maximum profit is $348.82 per contract and the computed maximum loss is -$97.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a VPL butterfly?
- The breakeven for the VPL butterfly priced on this page is roughly $105.97 and $114.03 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 VPL market-implied 1-standard-deviation expected move is approximately 7.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on VPL?
- Butterflies on VPL are pinning bets - traders use them when they expect VPL 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 VPL implied volatility affect this butterfly?
- VPL ATM IV is at 26.30% with IV rank near 28.29%, 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.