BPH Butterfly Strategy
BPH (BP p.l.c. ADRhedged), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Under typical market conditions, this investment vehicle commits at least 95% of its total net assets to American Depositary Receipts (ADRs) issued by BP p.l.c. It explicitly avoids making direct equity investments in the underlying company. Furthermore, this fund operates with a non-diversified investment strategy.
BPH (BP p.l.c. ADRhedged) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.2M, a beta of -0.44 versus the broader market, a 52-week range of 51.93-80.7, average daily share volume of 1K, a public-listing history dating back to 2025. These structural characteristics shape how BPH etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.44 indicates BPH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BPH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on BPH?
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.
BPH snapshot
As of November 13, 2026, spot at $73.33, ATM IV 29.80%, IV rank 6.85%, expected move 8.54%. The butterfly on BPH below is built from the November 13, 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 BPH specifically: BPH IV at 29.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a BPH butterfly, with a market-implied 1-standard-deviation move of approximately 8.54% (roughly $6.26 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 BPH expiries trade a higher absolute premium for lower per-day decay. Position sizing on BPH should anchor to the underlying notional of $73.33 per share and to the trader's directional view on BPH etf.
BPH butterfly setup
The BPH butterfly below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With BPH at $73.33 on that close, the first option leg uses a $70.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BPH 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 BPH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $70.00 | $4.75 |
| Sell 2 | Call | $73.00 | $2.88 |
| Buy 1 | Call | $77.00 | $1.46 |
BPH butterfly risk and reward
- Net Premium / Debit
- -$46.00
- Max Profit (per contract)
- $250.65
- Max Loss (per contract)
- -$146.00
- Breakeven(s)
- $70.46, $75.54
- Risk / Reward Ratio
- 1.717
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.
BPH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on BPH. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$46.00 |
| $16.22 | -77.9% | -$46.00 |
| $32.44 | -55.8% | -$46.00 |
| $48.65 | -33.7% | -$46.00 |
| $64.86 | -11.6% | -$46.00 |
| $81.07 | +10.6% | -$146.00 |
| $97.29 | +32.7% | -$146.00 |
| $113.50 | +54.8% | -$146.00 |
| $129.71 | +76.9% | -$146.00 |
| $145.92 | +99.0% | -$146.00 |
When traders use butterfly on BPH
Butterflies on BPH are pinning bets - traders use them when they expect BPH 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.
BPH thesis for this butterfly
The market-implied 1-standard-deviation range for BPH extends from approximately $67.07 on the downside to $79.59 on the upside. A BPH long call butterfly is a pinning play: it pays maximum at the middle strike if BPH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BPH IV rank near 6.85% 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 BPH at 29.80%. As a Financial Services name, BPH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BPH-specific events.
BPH 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. BPH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BPH alongside the broader basket even when BPH-specific fundamentals are unchanged. Always rebuild the position from current BPH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on BPH?
- A butterfly on BPH is the butterfly strategy applied to BPH (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 BPH etf at $73.33 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed BPH chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are BPH 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 BPH butterfly priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 29.80%), the computed maximum profit is $250.65 per contract and the computed maximum loss is -$146.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a BPH butterfly?
- The breakeven for the BPH butterfly priced on this page is roughly $70.46 and $75.54 at expiration, derived from the November 13, 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 BPH market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on BPH?
- Butterflies on BPH are pinning bets - traders use them when they expect BPH 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 BPH implied volatility affect this butterfly?
- BPH ATM IV is at 29.80% with IV rank near 6.85%, 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.