APLD Butterfly Strategy
APLD (Applied Digital Corporation), in the Technology sector, (Information Technology Services industry), listed on NASDAQ.
Applied Digital Corporation designs, develops, and operates digital infrastructure solutions and cloud services high-performance computing (HPC) and artificial intelligence industries in North America. It operates through three segments: Data Center Hosting Business, Cloud Services Business, and HPC Hosting Business. The company offers infrastructure services to crypto mining customers; and GPU computing solutions for critical workloads related to AI, machine learning, and other HPC tasks. It also engages in the designing, constructing, and managing of data centers to support HPC applications. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.
APLD (Applied Digital Corporation) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $13.00B, a beta of 5.70 versus the broader market, a 52-week range of 5.512-46.64, average daily share volume of 21.3M, a public-listing history dating back to 2022, approximately 150 full-time employees. These structural characteristics shape how APLD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 5.70 indicates APLD 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 APLD?
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 APLD snapshot
As of May 15, 2026, spot at $42.53, ATM IV 100.44%, IV rank 28.64%, expected move 28.80%. The butterfly on APLD 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 28-day expiry.
Why this butterfly structure on APLD specifically: APLD IV at 100.44% is on the cheap side of its 1-year range, which favors premium-buying structures like a APLD butterfly, with a market-implied 1-standard-deviation move of approximately 28.80% (roughly $12.25 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated APLD expiries trade a higher absolute premium for lower per-day decay. Position sizing on APLD should anchor to the underlying notional of $42.53 per share and to the trader's directional view on APLD stock.
APLD butterfly setup
The APLD 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 APLD near $42.53, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed APLD chain at a 28-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 APLD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $40.00 | $6.23 |
| Sell 2 | Call | $43.00 | $4.68 |
| Buy 1 | Call | $45.00 | $3.88 |
APLD butterfly risk and reward
- Net Premium / Debit
- -$75.00
- Max Profit (per contract)
- $207.39
- Max Loss (per contract)
- -$75.00
- Breakeven(s)
- $40.75
- Risk / Reward Ratio
- 2.765
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.
APLD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on APLD. 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% | -$75.00 |
| $9.41 | -77.9% | -$75.00 |
| $18.82 | -55.8% | -$75.00 |
| $28.22 | -33.7% | -$75.00 |
| $37.62 | -11.5% | -$75.00 |
| $47.02 | +10.6% | +$25.00 |
| $56.43 | +32.7% | +$25.00 |
| $65.83 | +54.8% | +$25.00 |
| $75.23 | +76.9% | +$25.00 |
| $84.63 | +99.0% | +$25.00 |
When traders use butterfly on APLD
Butterflies on APLD are pinning bets - traders use them when they expect APLD 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.
APLD thesis for this butterfly
The market-implied 1-standard-deviation range for APLD extends from approximately $30.28 on the downside to $54.78 on the upside. A APLD long call butterfly is a pinning play: it pays maximum at the middle strike if APLD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current APLD IV rank near 28.64% 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 APLD at 100.44%. As a Technology name, APLD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to APLD-specific events.
APLD 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. APLD positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move APLD alongside the broader basket even when APLD-specific fundamentals are unchanged. Always rebuild the position from current APLD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on APLD?
- A butterfly on APLD is the butterfly strategy applied to APLD (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 APLD stock trading near $42.53, the strikes shown on this page are snapped to the nearest listed APLD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are APLD 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 APLD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 100.44%), the computed maximum profit is $207.39 per contract and the computed maximum loss is -$75.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a APLD butterfly?
- The breakeven for the APLD butterfly priced on this page is roughly $40.75 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 APLD market-implied 1-standard-deviation expected move is approximately 28.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on APLD?
- Butterflies on APLD are pinning bets - traders use them when they expect APLD 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 APLD implied volatility affect this butterfly?
- APLD ATM IV is at 100.44% with IV rank near 28.64%, 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.