How are XSMO 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 XSMO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 24.60%), the computed maximum profit is $398.49 per contract and the computed maximum loss is -$101.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a XSMO butterfly?

The breakeven for the XSMO butterfly priced on this page is roughly $86.01 and $94.47 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The XSMO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current XSMO implied volatility affect this butterfly?

XSMO ATM IV is at 24.60% with IV rank near 2.70%, 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.

XSMO Butterfly Strategy

XSMO (Invesco S&P SmallCap Momentum ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.

The Invesco S&P SmallCap Momentum ETF (the Fund) seeks to mirror the performance of the S&P Smallcap 600 Momentum Index (the Index). To achieve this objective, the Fund pledges to invest a minimum of 90% of its total capital in the constituent securities of the Index. The Index itself comprises 120 stocks selected from the broader S&P SmallCap 600 Index. These holdings are chosen based on their superior "momentum scores," which are calculated by assessing each security's upward price movements in comparison to other eligible stocks within the S&P SmallCap 600 Index. Both the Fund and its underlying Index are adjusted and re-evaluated on a semi-annual basis.

XSMO (Invesco S&P SmallCap Momentum ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $2.36B, a beta of 1.10 versus the broader market, a 52-week range of 68.59-93.68, average daily share volume of 246K, a public-listing history dating back to 2005. These structural characteristics shape how XSMO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.10 places XSMO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XSMO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on XSMO?

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.

XSMO snapshot

As of August 14, 2026, spot at $89.54, ATM IV 24.60%, IV rank 2.70%, expected move 7.05%. The butterfly on XSMO below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this butterfly structure on XSMO specifically: XSMO IV at 24.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a XSMO butterfly, with a market-implied 1-standard-deviation move of approximately 7.05% (roughly $6.31 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated XSMO expiries trade a higher absolute premium for lower per-day decay. Position sizing on XSMO should anchor to the underlying notional of $89.54 per share and to the trader's directional view on XSMO etf.

XSMO butterfly setup

The XSMO butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With XSMO at $89.54 on that close, the first option leg uses a $85.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XSMO chain at a 35-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 XSMO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$85.00	$4.30
Sell 2	Call	$90.00	$2.07
Buy 1	Call	$94.00	$0.85

XSMO butterfly risk and reward

Net Premium / Debit: -$101.00
Max Profit (per contract): $398.49
Max Loss (per contract): -$101.00
Breakeven(s): $86.01, $94.47
Risk / Reward Ratio: 3.945

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.

XSMO butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on XSMO. 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%	-$101.00
$19.81	-77.9%	-$101.00
$39.60	-55.8%	-$101.00
$59.40	-33.7%	-$101.00
$79.20	-11.6%	-$101.00
$98.99	+10.6%	-$1.00
$118.79	+32.7%	-$1.00
$138.59	+54.8%	-$1.00
$158.38	+76.9%	-$1.00
$178.18	+99.0%	-$1.00

When traders use butterfly on XSMO

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

XSMO thesis for this butterfly

The market-implied 1-standard-deviation range for XSMO extends from approximately $83.23 on the downside to $95.85 on the upside. A XSMO long call butterfly is a pinning play: it pays maximum at the middle strike if XSMO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XSMO IV rank near 2.70% 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 XSMO at 24.60%. As a Financial Services name, XSMO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XSMO-specific events.

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

Frequently asked questions

What is a butterfly on XSMO?: A butterfly on XSMO is the butterfly strategy applied to XSMO (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 XSMO etf at $89.54 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed XSMO chain strike and the premiums come straight from that session's bid/ask midpoint.
How are XSMO 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 XSMO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 24.60%), the computed maximum profit is $398.49 per contract and the computed maximum loss is -$101.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a XSMO butterfly?: The breakeven for the XSMO butterfly priced on this page is roughly $86.01 and $94.47 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The XSMO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on XSMO?: Butterflies on XSMO are pinning bets - traders use them when they expect XSMO 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 XSMO implied volatility affect this butterfly?: XSMO ATM IV is at 24.60% with IV rank near 2.70%, 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.