How are XMHQ 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 XMHQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 16.80%), the computed maximum profit is $422.76 per contract and the computed maximum loss is -$229.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a XMHQ butterfly?

The breakeven for the XMHQ butterfly priced on this page is roughly $108.29 and $117.71 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 XMHQ market-implied 1-standard-deviation expected move is approximately 4.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current XMHQ implied volatility affect this butterfly?

XMHQ ATM IV is at 16.80% with IV rank near 0.68%, 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.

XMHQ Butterfly Strategy

XMHQ (Invesco S&P MidCap Quality ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.

The Invesco S&P MidCap Quality ETF (XMHQ) is designed to mirror the performance of the S&P MidCap 400 Quality Index. The ETF commits at least 90% of its total capital to the individual securities that make up this benchmark index. The index itself utilizes a modified market capitalization weighting approach and consists of roughly 80 companies drawn from the larger S&P MidCap 400 Index. These businesses are identified based on their excellent quality scores, which are determined by a combination of three exclusive factors. Both the ETF and its corresponding index are adjusted twice a year.

XMHQ (Invesco S&P MidCap Quality ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $5.37B, a beta of 0.98 versus the broader market, a 52-week range of 97.49-113.29, average daily share volume of 193K, a public-listing history dating back to 2006. These structural characteristics shape how XMHQ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.98 places XMHQ roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XMHQ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on XMHQ?

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 XMHQ snapshot

As of June 30, 2026, spot at $112.91, ATM IV 16.80%, IV rank 0.68%, expected move 4.82%. The butterfly on XMHQ 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 80-day expiry.

Why this butterfly structure on XMHQ specifically: XMHQ IV at 16.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a XMHQ butterfly, with a market-implied 1-standard-deviation move of approximately 4.82% (roughly $5.44 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated XMHQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on XMHQ should anchor to the underlying notional of $112.91 per share and to the trader's directional view on XMHQ etf.

XMHQ butterfly setup

The XMHQ 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 XMHQ near $112.91, the first option leg uses a $107.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XMHQ chain at a 80-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 XMHQ shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$107.00	$8.00
Sell 2	Call	$113.00	$4.10
Buy 1	Call	$120.00	$1.49

XMHQ butterfly risk and reward

Net Premium / Debit: -$129.00
Max Profit (per contract): $422.76
Max Loss (per contract): -$229.00
Breakeven(s): $108.29, $117.71
Risk / Reward Ratio: 1.846

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.

XMHQ butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on XMHQ. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$129.00
$24.97	-77.9%	-$129.00
$49.94	-55.8%	-$129.00
$74.90	-33.7%	-$129.00
$99.87	-11.6%	-$129.00
$124.83	+10.6%	-$229.00
$149.79	+32.7%	-$229.00
$174.76	+54.8%	-$229.00
$199.72	+76.9%	-$229.00
$224.69	+99.0%	-$229.00

When traders use butterfly on XMHQ

Butterflies on XMHQ are pinning bets - traders use them when they expect XMHQ 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.

XMHQ thesis for this butterfly

The market-implied 1-standard-deviation range for XMHQ extends from approximately $107.47 on the downside to $118.35 on the upside. A XMHQ long call butterfly is a pinning play: it pays maximum at the middle strike if XMHQ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XMHQ IV rank near 0.68% 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 XMHQ at 16.80%. As a Financial Services name, XMHQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XMHQ-specific events.

XMHQ 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. XMHQ positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XMHQ alongside the broader basket even when XMHQ-specific fundamentals are unchanged. Always rebuild the position from current XMHQ chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on XMHQ?: A butterfly on XMHQ is the butterfly strategy applied to XMHQ (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 XMHQ etf trading near $112.91, the strikes shown on this page are snapped to the nearest listed XMHQ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are XMHQ 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 XMHQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 16.80%), the computed maximum profit is $422.76 per contract and the computed maximum loss is -$229.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a XMHQ butterfly?: The breakeven for the XMHQ butterfly priced on this page is roughly $108.29 and $117.71 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 XMHQ market-implied 1-standard-deviation expected move is approximately 4.82%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on XMHQ?: Butterflies on XMHQ are pinning bets - traders use them when they expect XMHQ 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 XMHQ implied volatility affect this butterfly?: XMHQ ATM IV is at 16.80% with IV rank near 0.68%, 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.