WTMF Butterfly Strategy
WTMF (WisdomTree Managed Futures Strategy Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund normally invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in "managed futures". It is an actively managed exchange traded fund ("ETF") that seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad market equity or fixed income returns. It is non-diversified.
WTMF (WisdomTree Managed Futures Strategy Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $224.0M, a beta of 0.27 versus the broader market, a 52-week range of 34.36-41.43, average daily share volume of 30K, a public-listing history dating back to 2011. These structural characteristics shape how WTMF etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.27 indicates WTMF has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. WTMF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on WTMF?
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 WTMF snapshot
As of May 15, 2026, spot at $40.94, ATM IV 22.10%, IV rank 14.17%, expected move 6.34%. The butterfly on WTMF 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 WTMF specifically: WTMF IV at 22.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a WTMF butterfly, with a market-implied 1-standard-deviation move of approximately 6.34% (roughly $2.59 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 WTMF expiries trade a higher absolute premium for lower per-day decay. Position sizing on WTMF should anchor to the underlying notional of $40.94 per share and to the trader's directional view on WTMF etf.
WTMF butterfly setup
The WTMF 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 WTMF near $40.94, 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 WTMF 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 WTMF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $39.00 | $2.18 |
| Sell 2 | Call | $41.00 | $1.15 |
| Buy 1 | Call | $43.00 | $0.41 |
WTMF butterfly risk and reward
- Net Premium / Debit
- -$28.50
- Max Profit (per contract)
- $156.43
- Max Loss (per contract)
- -$28.50
- Breakeven(s)
- $39.29, $42.72
- Risk / Reward Ratio
- 5.489
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.
WTMF butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WTMF. 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% | -$28.50 |
| $9.06 | -77.9% | -$28.50 |
| $18.11 | -55.8% | -$28.50 |
| $27.16 | -33.7% | -$28.50 |
| $36.21 | -11.5% | -$28.50 |
| $45.26 | +10.6% | -$28.50 |
| $54.32 | +32.7% | -$28.50 |
| $63.37 | +54.8% | -$28.50 |
| $72.42 | +76.9% | -$28.50 |
| $81.47 | +99.0% | -$28.50 |
When traders use butterfly on WTMF
Butterflies on WTMF are pinning bets - traders use them when they expect WTMF 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.
WTMF thesis for this butterfly
The market-implied 1-standard-deviation range for WTMF extends from approximately $38.35 on the downside to $43.53 on the upside. A WTMF long call butterfly is a pinning play: it pays maximum at the middle strike if WTMF settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WTMF IV rank near 14.17% 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 WTMF at 22.10%. As a Financial Services name, WTMF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WTMF-specific events.
WTMF 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. WTMF positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WTMF alongside the broader basket even when WTMF-specific fundamentals are unchanged. Always rebuild the position from current WTMF chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WTMF?
- A butterfly on WTMF is the butterfly strategy applied to WTMF (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 WTMF etf trading near $40.94, the strikes shown on this page are snapped to the nearest listed WTMF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WTMF 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 WTMF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.10%), the computed maximum profit is $156.43 per contract and the computed maximum loss is -$28.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WTMF butterfly?
- The breakeven for the WTMF butterfly priced on this page is roughly $39.29 and $42.72 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 WTMF market-implied 1-standard-deviation expected move is approximately 6.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WTMF?
- Butterflies on WTMF are pinning bets - traders use them when they expect WTMF 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 WTMF implied volatility affect this butterfly?
- WTMF ATM IV is at 22.10% with IV rank near 14.17%, 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.