FSM Butterfly Strategy
FSM (Fortuna Mining Corp.), in the Basic Materials sector, (Other Precious Metals industry), listed on NYSE.
Fortuna Silver Mines Inc. engages in the acquisition, exploration, and mining of precious and base metal deposits in Argentina, Burkina Faso, Mexico, Peru, and Côte d'Ivoire. It holds interest in the Caylloma silver, lead, and zinc mine located in southern Peru; the San Jose silver and gold mine situated in southern Mexico; the Lindero gold project located in Argentina; Yaramoko gold mine situated in south western Burkina Faso; and Séguéla gold mine located in south western Côte d'Ivoire. The company was formerly known as Fortuna Ventures Inc. and changed its name to Fortuna Silver Mines Inc. in June 2005. Fortuna Silver Mines Inc. was incorporated in 1990 and is based in Vancouver, Canada.
FSM (Fortuna Mining Corp.) trades in the Basic Materials sector, specifically Other Precious Metals, with a market capitalization of approximately $3.26B, a trailing P/E of 9.57, a beta of 2.09 versus the broader market, a 52-week range of 5.23-13.85, average daily share volume of 7.0M, a public-listing history dating back to 2007, approximately 5K full-time employees. These structural characteristics shape how FSM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.09 indicates FSM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 9.57 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on FSM?
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 FSM snapshot
As of May 15, 2026, spot at $9.57, ATM IV 55.90%, IV rank 12.87%, expected move 16.03%. The butterfly on FSM 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 FSM specifically: FSM IV at 55.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a FSM butterfly, with a market-implied 1-standard-deviation move of approximately 16.03% (roughly $1.53 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 FSM expiries trade a higher absolute premium for lower per-day decay. Position sizing on FSM should anchor to the underlying notional of $9.57 per share and to the trader's directional view on FSM stock.
FSM butterfly setup
The FSM 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 FSM near $9.57, the first option leg uses a $9.09 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FSM 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 FSM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $9.09 | N/A |
| Sell 2 | Call | $9.57 | N/A |
| Buy 1 | Call | $10.05 | N/A |
FSM butterfly risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
FSM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FSM. 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.
When traders use butterfly on FSM
Butterflies on FSM are pinning bets - traders use them when they expect FSM 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.
FSM thesis for this butterfly
The market-implied 1-standard-deviation range for FSM extends from approximately $8.04 on the downside to $11.10 on the upside. A FSM long call butterfly is a pinning play: it pays maximum at the middle strike if FSM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FSM IV rank near 12.87% 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 FSM at 55.90%. As a Basic Materials name, FSM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FSM-specific events.
FSM 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. FSM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FSM alongside the broader basket even when FSM-specific fundamentals are unchanged. Always rebuild the position from current FSM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FSM?
- A butterfly on FSM is the butterfly strategy applied to FSM (stock). 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 FSM stock trading near $9.57, the strikes shown on this page are snapped to the nearest listed FSM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FSM 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 FSM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FSM butterfly?
- The breakeven for the FSM butterfly priced on this page is no defined breakeven on the modeled curve 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 FSM market-implied 1-standard-deviation expected move is approximately 16.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FSM?
- Butterflies on FSM are pinning bets - traders use them when they expect FSM 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 FSM implied volatility affect this butterfly?
- FSM ATM IV is at 55.90% with IV rank near 12.87%, 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.