WTAI Butterfly Strategy
WTAI (WisdomTree Artificial Intelligence and Innovation Fund), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The index is designed to provide exposure to equity securities of exchange-listed companies globally, including developed countries and emerging markets throughout the world, which are primarily involved in the investment theme of Artificial Intelligence and Innovation. To the extent the index concentrates in the securities of a particular industry or group of industries, the fund will concentrate its investments to approximately the same extent as the index. It is non-diversified.
WTAI (WisdomTree Artificial Intelligence and Innovation Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $559.9M, a beta of 1.81 versus the broader market, a 52-week range of 21.67-41.495, average daily share volume of 118K, a public-listing history dating back to 2021. These structural characteristics shape how WTAI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.81 indicates WTAI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. WTAI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on WTAI?
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 WTAI snapshot
As of May 15, 2026, spot at $40.55, ATM IV 31.90%, IV rank 3.91%, expected move 9.15%. The butterfly on WTAI 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 WTAI specifically: WTAI IV at 31.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a WTAI butterfly, with a market-implied 1-standard-deviation move of approximately 9.15% (roughly $3.71 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 WTAI expiries trade a higher absolute premium for lower per-day decay. Position sizing on WTAI should anchor to the underlying notional of $40.55 per share and to the trader's directional view on WTAI etf.
WTAI butterfly setup
The WTAI 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 WTAI near $40.55, 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 WTAI 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 WTAI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $39.00 | $2.40 |
| Sell 2 | Call | $41.00 | $1.53 |
| Buy 1 | Call | $43.00 | $1.00 |
WTAI butterfly risk and reward
- Net Premium / Debit
- -$35.00
- Max Profit (per contract)
- $148.38
- Max Loss (per contract)
- -$35.00
- Breakeven(s)
- $39.35, $42.65
- Risk / Reward Ratio
- 4.239
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.
WTAI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WTAI. 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% | -$35.00 |
| $8.97 | -77.9% | -$35.00 |
| $17.94 | -55.8% | -$35.00 |
| $26.90 | -33.7% | -$35.00 |
| $35.87 | -11.5% | -$35.00 |
| $44.83 | +10.6% | -$35.00 |
| $53.80 | +32.7% | -$35.00 |
| $62.76 | +54.8% | -$35.00 |
| $71.73 | +76.9% | -$35.00 |
| $80.69 | +99.0% | -$35.00 |
When traders use butterfly on WTAI
Butterflies on WTAI are pinning bets - traders use them when they expect WTAI 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.
WTAI thesis for this butterfly
The market-implied 1-standard-deviation range for WTAI extends from approximately $36.84 on the downside to $44.26 on the upside. A WTAI long call butterfly is a pinning play: it pays maximum at the middle strike if WTAI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WTAI IV rank near 3.91% 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 WTAI at 31.90%. As a Financial Services name, WTAI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WTAI-specific events.
WTAI 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. WTAI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WTAI alongside the broader basket even when WTAI-specific fundamentals are unchanged. Always rebuild the position from current WTAI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WTAI?
- A butterfly on WTAI is the butterfly strategy applied to WTAI (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 WTAI etf trading near $40.55, the strikes shown on this page are snapped to the nearest listed WTAI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WTAI 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 WTAI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.90%), the computed maximum profit is $148.38 per contract and the computed maximum loss is -$35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WTAI butterfly?
- The breakeven for the WTAI butterfly priced on this page is roughly $39.35 and $42.65 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 WTAI market-implied 1-standard-deviation expected move is approximately 9.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WTAI?
- Butterflies on WTAI are pinning bets - traders use them when they expect WTAI 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 WTAI implied volatility affect this butterfly?
- WTAI ATM IV is at 31.90% with IV rank near 3.91%, 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.