MX Butterfly Strategy
MX (MagnaChip Semiconductor), in the Technology sector, (Semiconductors industry), listed on NYSE.
Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, computing, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, monitors, notebook PCs, tablet PC and TVs, liquid crystal display, organic light emitting diodes (OLED), and micro light emitting diode (Micro LED) panel. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, level shifter, and other consumer electronics, as well as for power suppliers, e-bikes, photovoltaic inverters, LED lighting, and motor drives; and OLED display driver integrated circuit products. It serves consumer, computing, communication, automotive and industrial electronics OEMs, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in Korea, the Asia Pacific, the United States, and Europe. The company sells its products through a direct sales force and a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2003 and is based in Cheongju-si, South Korea.
MX (MagnaChip Semiconductor) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $139.4M, a beta of 1.66 versus the broader market, a 52-week range of 2.18-9.86, average daily share volume of 2.2M, a public-listing history dating back to 2011, approximately 711 full-time employees. These structural characteristics shape how MX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.66 indicates MX has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on MX?
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.
MX snapshot
As of August 14, 2026, spot at $3.79, ATM IV 21.50%, IV rank 0.54%, expected move 6.16%. The butterfly on MX below is built from the 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 MX specifically: MX IV at 21.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a MX butterfly, with a market-implied 1-standard-deviation move of approximately 6.16% (roughly $0.23 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 MX expiries trade a higher absolute premium for lower per-day decay. Position sizing on MX should anchor to the underlying notional of $3.79 per share and to the trader's directional view on MX stock.
MX butterfly setup
The MX 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 MX at $3.79 on that close, the first option leg uses a $3.60 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MX 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 MX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.60 | N/A |
| Sell 2 | Call | $3.79 | N/A |
| Buy 1 | Call | $3.98 | N/A |
MX 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.
MX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MX. 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 MX
Butterflies on MX are pinning bets - traders use them when they expect MX 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.
MX thesis for this butterfly
The market-implied 1-standard-deviation range for MX extends from approximately $3.56 on the downside to $4.02 on the upside. A MX long call butterfly is a pinning play: it pays maximum at the middle strike if MX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MX IV rank near 0.54% 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 MX at 21.50%. As a Technology name, MX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MX-specific events.
MX 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. MX positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MX alongside the broader basket even when MX-specific fundamentals are unchanged. Always rebuild the position from current MX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MX?
- A butterfly on MX is the butterfly strategy applied to MX (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 MX stock at $3.79 on the most recent close, the strikes shown on this page are snapped to the nearest listed MX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are MX 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 MX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 21.50%), 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 MX butterfly?
- The breakeven for the MX butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 MX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MX?
- Butterflies on MX are pinning bets - traders use them when they expect MX 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 MX implied volatility affect this butterfly?
- MX ATM IV is at 21.50% with IV rank near 0.54%, 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.