A buffer ETF uses options to limit losses over a set outcome period, often one year.
In exchange, it caps gains.
Both terms are set on reset day, the first day of the period.
Reset day
The fund replaces its expiring options with a new set.
The buffer size is usually fixed by the fund’s design. The cap depends on option prices that day.
Buying mid-period
The stated buffer and cap apply in full only from the start of the period to its end.
A buyer mid-period starts from today’s price, not reset day’s.
If the market has risen, less room is left under the cap, and losses can start before the buffer.
BALT has 70 days left in its period. From its Oct 22, 2026 price, it can gain 2.2% more before its cap, and fall 0.3% before its buffer.
Selling mid-period
A seller mid-period receives the market price, not the outcome at the period’s end.
Trading costs
300 buffer ETFs had a median 30-day spread of 0.21% to Oct 22, 2026.
The fair limit is midpoint + X¢ to buy, midpoint − X¢ to sell.
X is half the fund’s typical spread in cents, rounded up, and never less than 1¢.