WCLD Butterfly Strategy
WCLD (WisdomTree Cloud Computing Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Under normal circumstances, at least 80% of the fund’s total assets (exclusive of collateral held from securities lending) will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is designed to track the performance of emerging public companies primarily involved in providing cloud computing software and services to their customers. It is non-diversified.
WCLD (WisdomTree Cloud Computing Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $215.3M, a beta of 0.96 versus the broader market, a 52-week range of 23.89-37.115, average daily share volume of 1.3M, a public-listing history dating back to 2019. These structural characteristics shape how WCLD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.96 places WCLD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on WCLD?
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 WCLD snapshot
As of May 15, 2026, spot at $28.64, ATM IV 48.80%, IV rank 11.92%, expected move 13.99%. The butterfly on WCLD 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 WCLD specifically: WCLD IV at 48.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a WCLD butterfly, with a market-implied 1-standard-deviation move of approximately 13.99% (roughly $4.01 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 WCLD expiries trade a higher absolute premium for lower per-day decay. Position sizing on WCLD should anchor to the underlying notional of $28.64 per share and to the trader's directional view on WCLD etf.
WCLD butterfly setup
The WCLD 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 WCLD near $28.64, the first option leg uses a $27.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WCLD 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 WCLD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $27.00 | $2.43 |
| Sell 2 | Call | $29.00 | $1.75 |
| Buy 1 | Call | $30.00 | $1.24 |
WCLD butterfly risk and reward
- Net Premium / Debit
- -$16.50
- Max Profit (per contract)
- $175.83
- Max Loss (per contract)
- -$16.50
- Breakeven(s)
- $27.17
- Risk / Reward Ratio
- 10.656
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.
WCLD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WCLD. 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% | -$16.50 |
| $6.34 | -77.9% | -$16.50 |
| $12.67 | -55.8% | -$16.50 |
| $19.00 | -33.6% | -$16.50 |
| $25.34 | -11.5% | -$16.50 |
| $31.67 | +10.6% | +$83.50 |
| $38.00 | +32.7% | +$83.50 |
| $44.33 | +54.8% | +$83.50 |
| $50.66 | +76.9% | +$83.50 |
| $56.99 | +99.0% | +$83.50 |
When traders use butterfly on WCLD
Butterflies on WCLD are pinning bets - traders use them when they expect WCLD 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.
WCLD thesis for this butterfly
The market-implied 1-standard-deviation range for WCLD extends from approximately $24.63 on the downside to $32.65 on the upside. A WCLD long call butterfly is a pinning play: it pays maximum at the middle strike if WCLD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WCLD IV rank near 11.92% 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 WCLD at 48.80%. As a Financial Services name, WCLD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WCLD-specific events.
WCLD 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. WCLD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WCLD alongside the broader basket even when WCLD-specific fundamentals are unchanged. Always rebuild the position from current WCLD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WCLD?
- A butterfly on WCLD is the butterfly strategy applied to WCLD (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 WCLD etf trading near $28.64, the strikes shown on this page are snapped to the nearest listed WCLD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WCLD 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 WCLD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 48.80%), the computed maximum profit is $175.83 per contract and the computed maximum loss is -$16.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WCLD butterfly?
- The breakeven for the WCLD butterfly priced on this page is roughly $27.17 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 WCLD market-implied 1-standard-deviation expected move is approximately 13.99%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WCLD?
- Butterflies on WCLD are pinning bets - traders use them when they expect WCLD 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 WCLD implied volatility affect this butterfly?
- WCLD ATM IV is at 48.80% with IV rank near 11.92%, 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.