XBIL Butterfly Strategy
XBIL (US Treasury 6 Month Bill ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Under normal market conditions, The adviser seeks to achieve the fund’s investment objective by investing at least 80% of the fund’s net assets (plus any borrowings for investment purposes) in the component securities of the underlying index. The underlying index is comprised of a single issue purchased at the beginning of the month and held for a full month.
XBIL (US Treasury 6 Month Bill ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $749.2M, a beta of 0.02 versus the broader market, a 52-week range of 49.98-50.22, average daily share volume of 137K, a public-listing history dating back to 2023. These structural characteristics shape how XBIL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.02 indicates XBIL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. XBIL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on XBIL?
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 XBIL snapshot
As of May 15, 2026, spot at $50.11, ATM IV 462.60%, IV rank 98.07%, expected move 132.62%. The butterfly on XBIL 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 XBIL specifically: XBIL IV at 462.60% is rich versus its 1-year range, which makes a premium-buying XBIL butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 132.62% (roughly $66.46 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 XBIL expiries trade a higher absolute premium for lower per-day decay. Position sizing on XBIL should anchor to the underlying notional of $50.11 per share and to the trader's directional view on XBIL etf.
XBIL butterfly setup
The XBIL 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 XBIL near $50.11, the first option leg uses a $48.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XBIL 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 XBIL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $48.00 | $2.18 |
| Sell 2 | Call | $50.00 | $0.56 |
| Buy 1 | Call | $53.00 | $0.01 |
XBIL butterfly risk and reward
- Net Premium / Debit
- -$106.50
- Max Profit (per contract)
- $79.82
- Max Loss (per contract)
- -$206.50
- Breakeven(s)
- $49.07, $50.94
- Risk / Reward Ratio
- 0.387
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.
XBIL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on XBIL. 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% | -$106.50 |
| $11.09 | -77.9% | -$106.50 |
| $22.17 | -55.8% | -$106.50 |
| $33.25 | -33.7% | -$106.50 |
| $44.32 | -11.5% | -$106.50 |
| $55.40 | +10.6% | -$206.50 |
| $66.48 | +32.7% | -$206.50 |
| $77.56 | +54.8% | -$206.50 |
| $88.64 | +76.9% | -$206.50 |
| $99.72 | +99.0% | -$206.50 |
When traders use butterfly on XBIL
Butterflies on XBIL are pinning bets - traders use them when they expect XBIL 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.
XBIL thesis for this butterfly
The market-implied 1-standard-deviation range for XBIL extends from approximately $-16.35 on the downside to $116.57 on the upside. A XBIL long call butterfly is a pinning play: it pays maximum at the middle strike if XBIL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XBIL IV rank near 98.07% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on XBIL at 462.60%. As a Financial Services name, XBIL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XBIL-specific events.
XBIL 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. XBIL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XBIL alongside the broader basket even when XBIL-specific fundamentals are unchanged. Always rebuild the position from current XBIL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on XBIL?
- A butterfly on XBIL is the butterfly strategy applied to XBIL (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 XBIL etf trading near $50.11, the strikes shown on this page are snapped to the nearest listed XBIL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are XBIL 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 XBIL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 462.60%), the computed maximum profit is $79.82 per contract and the computed maximum loss is -$206.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a XBIL butterfly?
- The breakeven for the XBIL butterfly priced on this page is roughly $49.07 and $50.94 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 XBIL market-implied 1-standard-deviation expected move is approximately 132.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on XBIL?
- Butterflies on XBIL are pinning bets - traders use them when they expect XBIL 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 XBIL implied volatility affect this butterfly?
- XBIL ATM IV is at 462.60% with IV rank near 98.07%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.