ALRS Butterfly Strategy
ALRS (Alerus Financial Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The company operates in four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services.
ALRS (Alerus Financial Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $668.7M, a trailing P/E of 24.94, a beta of 0.69 versus the broader market, a 52-week range of 20.26-27.6, average daily share volume of 144K, a public-listing history dating back to 2003, approximately 846 full-time employees. These structural characteristics shape how ALRS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.69 indicates ALRS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ALRS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ALRS?
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 ALRS snapshot
As of May 15, 2026, spot at $26.54, ATM IV 23.00%, IV rank 2.03%, expected move 6.59%. The butterfly on ALRS 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 ALRS specifically: ALRS IV at 23.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a ALRS butterfly, with a market-implied 1-standard-deviation move of approximately 6.59% (roughly $1.75 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 ALRS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALRS should anchor to the underlying notional of $26.54 per share and to the trader's directional view on ALRS stock.
ALRS butterfly setup
The ALRS 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 ALRS near $26.54, the first option leg uses a $25.21 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALRS 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 ALRS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $25.21 | N/A |
| Sell 2 | Call | $26.54 | N/A |
| Buy 1 | Call | $27.87 | N/A |
ALRS 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.
ALRS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ALRS. 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 ALRS
Butterflies on ALRS are pinning bets - traders use them when they expect ALRS 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.
ALRS thesis for this butterfly
The market-implied 1-standard-deviation range for ALRS extends from approximately $24.79 on the downside to $28.29 on the upside. A ALRS long call butterfly is a pinning play: it pays maximum at the middle strike if ALRS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ALRS IV rank near 2.03% 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 ALRS at 23.00%. As a Financial Services name, ALRS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALRS-specific events.
ALRS 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. ALRS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALRS alongside the broader basket even when ALRS-specific fundamentals are unchanged. Always rebuild the position from current ALRS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ALRS?
- A butterfly on ALRS is the butterfly strategy applied to ALRS (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 ALRS stock trading near $26.54, the strikes shown on this page are snapped to the nearest listed ALRS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ALRS 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 ALRS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.00%), 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 ALRS butterfly?
- The breakeven for the ALRS 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 ALRS market-implied 1-standard-deviation expected move is approximately 6.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ALRS?
- Butterflies on ALRS are pinning bets - traders use them when they expect ALRS 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 ALRS implied volatility affect this butterfly?
- ALRS ATM IV is at 23.00% with IV rank near 2.03%, 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.