AIRO Butterfly Strategy
AIRO (AIRO Group Holdings, Inc. Common Stock), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.
AIRO Group is a U.S.-based aerospace and defense company headquartered in Albuquerque, NM. It operates across four segments: drones, avionics, pilot training, and electric air mobility (eVTOL), with products like AI-enabled Sky Watch surveillance drones.
AIRO (AIRO Group Holdings, Inc. Common Stock) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $246.2M, a beta of 1.35 versus the broader market, a 52-week range of 6.9-39.07, average daily share volume of 541K, a public-listing history dating back to 2025, approximately 151 full-time employees. These structural characteristics shape how AIRO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.35 indicates AIRO 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 AIRO?
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 AIRO snapshot
As of May 15, 2026, spot at $6.39, ATM IV 103.60%, IV rank 52.02%, expected move 29.70%. The butterfly on AIRO 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 AIRO specifically: AIRO IV at 103.60% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 29.70% (roughly $1.90 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 AIRO expiries trade a higher absolute premium for lower per-day decay. Position sizing on AIRO should anchor to the underlying notional of $6.39 per share and to the trader's directional view on AIRO stock.
AIRO butterfly setup
The AIRO 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 AIRO near $6.39, the first option leg uses a $6.07 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AIRO 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 AIRO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $6.07 | N/A |
| Sell 2 | Call | $6.39 | N/A |
| Buy 1 | Call | $6.71 | N/A |
AIRO 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.
AIRO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AIRO. 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 AIRO
Butterflies on AIRO are pinning bets - traders use them when they expect AIRO 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.
AIRO thesis for this butterfly
The market-implied 1-standard-deviation range for AIRO extends from approximately $4.49 on the downside to $8.29 on the upside. A AIRO long call butterfly is a pinning play: it pays maximum at the middle strike if AIRO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AIRO IV rank near 52.02% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AIRO should anchor more to the directional view and the expected-move geometry. As a Industrials name, AIRO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AIRO-specific events.
AIRO 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. AIRO positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AIRO alongside the broader basket even when AIRO-specific fundamentals are unchanged. Always rebuild the position from current AIRO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AIRO?
- A butterfly on AIRO is the butterfly strategy applied to AIRO (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 AIRO stock trading near $6.39, the strikes shown on this page are snapped to the nearest listed AIRO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AIRO 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 AIRO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 103.60%), 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 AIRO butterfly?
- The breakeven for the AIRO 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 AIRO market-implied 1-standard-deviation expected move is approximately 29.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AIRO?
- Butterflies on AIRO are pinning bets - traders use them when they expect AIRO 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 AIRO implied volatility affect this butterfly?
- AIRO ATM IV is at 103.60% with IV rank near 52.02%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.