ALC Butterfly Strategy
ALC (Alcon Inc.), in the Healthcare sector, (Medical - Instruments & Supplies industry), listed on NYSE.
Alcon Inc., an eye care company, researches, develops, manufactures, distributes, and sells eye care products for eye care professionals and their patients worldwide. The company's Surgical segment offers equipment, instrumentation and diagnostics, intraocular lenses (IOLs), and other implantables; and consumables, including viscoelastics, surgical solutions, incisional instruments, surgical custom packs, and other products for use in surgical procedures. Its cataract products include centurion vision system, LenSx femtosecond laser, LuxOR surgical ophthalmic microscope, NGENUITY 3D visualization system, and ORA system for intra-operative measurements; custom pak surgical procedure packs; vitreoretinal products comprising constellation vision systems, procedure packs, lasers and hand-held microsurgical instruments, and grieshaber and MIVS instruments, as well as scissors, forceps and micro-instruments, medical grade vitreous tamponades, and Hypervit vitrectomy probes; refractive surgery products, including WaveLight lasers and Contoura Vision used for LASIK treatment; EX-PRESS glaucoma filtration device; and implantables products, including AcrySof IQ IOLs products include monofocal IOLs and advanced technology IOLs under the PanOptix and ReSTOR brands for the correction of presbyopia and astigmatism at the time of cataract surgery. Its Vision Care segment provides daily disposable, reusable, and color-enhancing contact lenses; ocular health products, such as dry eye, glaucoma, contact lens care, and ocular allergies; and ocular vitamins and redness relievers under the TOTAL, PRECISION, DAILIES AquaComfort PLUS, Air Optix, Opti-Free, Clear Care, Tears Naturale, Genteal, ICAPS, and Vitalux brands. The company was formerly known as Alcon Universal S.A. and changed the name to Alcon Inc. in December 2001. Alcon Inc. was founded in 1945 and is headquartered in Geneva, Switzerland.
ALC (Alcon Inc.) trades in the Healthcare sector, specifically Medical - Instruments & Supplies, with a market capitalization of approximately $30.92B, a trailing P/E of 37.91, a beta of 0.70 versus the broader market, a 52-week range of 61.835-92.55, average daily share volume of 1.8M, a public-listing history dating back to 2019, approximately 26K full-time employees. These structural characteristics shape how ALC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.70 indicates ALC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 37.91 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ALC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ALC?
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 ALC snapshot
As of May 15, 2026, spot at $63.74, ATM IV 27.20%, IV rank 17.74%, expected move 7.80%. The butterfly on ALC 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 ALC specifically: ALC IV at 27.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a ALC butterfly, with a market-implied 1-standard-deviation move of approximately 7.80% (roughly $4.97 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 ALC expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALC should anchor to the underlying notional of $63.74 per share and to the trader's directional view on ALC stock.
ALC butterfly setup
The ALC 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 ALC near $63.74, the first option leg uses a $60.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALC 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 ALC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $60.00 | $4.75 |
| Sell 2 | Call | $62.50 | $2.90 |
| Buy 1 | Call | $67.50 | $0.80 |
ALC butterfly risk and reward
- Net Premium / Debit
- +$25.00
- Max Profit (per contract)
- $246.58
- Max Loss (per contract)
- -$225.00
- Breakeven(s)
- $65.25
- Risk / Reward Ratio
- 1.096
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.
ALC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ALC. 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% | +$25.00 |
| $14.10 | -77.9% | +$25.00 |
| $28.19 | -55.8% | +$25.00 |
| $42.29 | -33.7% | +$25.00 |
| $56.38 | -11.5% | +$25.00 |
| $70.47 | +10.6% | -$225.00 |
| $84.56 | +32.7% | -$225.00 |
| $98.66 | +54.8% | -$225.00 |
| $112.75 | +76.9% | -$225.00 |
| $126.84 | +99.0% | -$225.00 |
When traders use butterfly on ALC
Butterflies on ALC are pinning bets - traders use them when they expect ALC 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.
ALC thesis for this butterfly
The market-implied 1-standard-deviation range for ALC extends from approximately $58.77 on the downside to $68.71 on the upside. A ALC long call butterfly is a pinning play: it pays maximum at the middle strike if ALC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ALC IV rank near 17.74% 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 ALC at 27.20%. As a Healthcare name, ALC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALC-specific events.
ALC 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. ALC positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALC alongside the broader basket even when ALC-specific fundamentals are unchanged. Always rebuild the position from current ALC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ALC?
- A butterfly on ALC is the butterfly strategy applied to ALC (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 ALC stock trading near $63.74, the strikes shown on this page are snapped to the nearest listed ALC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ALC 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 ALC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.20%), the computed maximum profit is $246.58 per contract and the computed maximum loss is -$225.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALC butterfly?
- The breakeven for the ALC butterfly priced on this page is roughly $65.25 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 ALC market-implied 1-standard-deviation expected move is approximately 7.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ALC?
- Butterflies on ALC are pinning bets - traders use them when they expect ALC 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 ALC implied volatility affect this butterfly?
- ALC ATM IV is at 27.20% with IV rank near 17.74%, 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.