AADX Butterfly Strategy
AADX (Applied Aerospace & Defense, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
Applied Aerospace & Defense, Inc. engages in the provision of integrated manufacturing solutions. It focuses on serving the following markets: Space and Launch Systems, Defense Aviation and Airborne Systems, and C5ISR and Precision Strike Systems. The company was founded on October 7, 2022 and is headquartered in Huntsville, AL.
AADX (Applied Aerospace & Defense, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $3.27B, a beta of 2.05 versus the broader market, a 52-week range of 16.57-24.24, average daily share volume of 1.7M, a public-listing history dating back to 2026, approximately 2K full-time employees. These structural characteristics shape how AADX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.05 indicates AADX 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 AADX?
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.
AADX snapshot
As of August 14, 2026, spot at $18.11, ATM IV 64.60%, expected move 18.52%. The butterfly on AADX 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 AADX specifically: IV rank is unavailable in the current snapshot, so regime-based timing for AADX is inferred from ATM IV at 64.60% alone, with a market-implied 1-standard-deviation move of approximately 18.52% (roughly $3.35 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 AADX expiries trade a higher absolute premium for lower per-day decay. Position sizing on AADX should anchor to the underlying notional of $18.11 per share and to the trader's directional view on AADX stock.
AADX butterfly setup
The AADX 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 AADX at $18.11 on that close, the first option leg uses a $17.20 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AADX 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 AADX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $17.20 | N/A |
| Sell 2 | Call | $18.11 | N/A |
| Buy 1 | Call | $19.02 | N/A |
AADX 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.
AADX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AADX. 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 AADX
Butterflies on AADX are pinning bets - traders use them when they expect AADX 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.
AADX thesis for this butterfly
The market-implied 1-standard-deviation range for AADX extends from approximately $14.76 on the downside to $21.46 on the upside. A AADX long call butterfly is a pinning play: it pays maximum at the middle strike if AADX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Industrials name, AADX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AADX-specific events.
AADX 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. AADX positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AADX alongside the broader basket even when AADX-specific fundamentals are unchanged. Always rebuild the position from current AADX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AADX?
- A butterfly on AADX is the butterfly strategy applied to AADX (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 AADX stock at $18.11 on the most recent close, the strikes shown on this page are snapped to the nearest listed AADX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are AADX 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 AADX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 64.60%), 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 AADX butterfly?
- The breakeven for the AADX 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 AADX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 18.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AADX?
- Butterflies on AADX are pinning bets - traders use them when they expect AADX 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 AADX implied volatility affect this butterfly?
- Current AADX ATM IV is 64.60%; IV rank context is unavailable in the current snapshot.