AQN Butterfly Strategy
AQN (Algonquin Power & Utilities Corp.), in the Utilities sector, (Diversified Utilities industry), listed on NYSE.
Algonquin Power & Utilities Corp. operates in the power and utility industries. It owns and operates a portfolio of regulated electric, water distribution and wastewater collection, and natural gas utility systems and transmission operations. As of December 31, 2025, it operated a portfolio of regulated utility systems in the United States, Canada, Bermuda, and Chile, serving approximately 1,272,000 customer connections. Its regulated electrical distribution utility systems and related transmission and generation assets are located in the states of Arkansas, California, Kansas, Missouri, Nevada, New Hampshire, and Oklahoma, as well as in Bermuda with approximately 311,000 electric customer connections. Its regulated water distribution and wastewater utility systems are located in the states of Arizona, Arkansas, California, Illinois, Missouri, New York, and Texas, as well as in Chile with approximately 583,000 customer connections. It’s regulated natural gas distribution utility systems are located in the states of Georgia, Illinois, Iowa, Massachusetts, Missouri, New Hampshire, and New York; and in the Canadian province of New Brunswick with approximately 378,000 natural gas customer connections.
AQN (Algonquin Power & Utilities Corp.) trades in the Utilities sector, specifically Diversified Utilities, with a market capitalization of approximately $4.63B, a trailing P/E of 27.39, a beta of 0.90 versus the broader market, a 52-week range of 5.32-7.11, average daily share volume of 4.3M, a public-listing history dating back to 2009, approximately 3K full-time employees. These structural characteristics shape how AQN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.90 places AQN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AQN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on AQN?
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 AQN snapshot
As of June 30, 2026, spot at $5.88, ATM IV 45.50%, IV rank 24.45%, expected move 13.04%. The butterfly on AQN 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 17-day expiry.
Why this butterfly structure on AQN specifically: AQN IV at 45.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a AQN butterfly, with a market-implied 1-standard-deviation move of approximately 13.04% (roughly $0.77 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AQN expiries trade a higher absolute premium for lower per-day decay. Position sizing on AQN should anchor to the underlying notional of $5.88 per share and to the trader's directional view on AQN stock.
AQN butterfly setup
The AQN 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 AQN near $5.88, the first option leg uses a $5.59 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AQN chain at a 17-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 AQN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.59 | N/A |
| Sell 2 | Call | $5.88 | N/A |
| Buy 1 | Call | $6.17 | N/A |
AQN 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.
AQN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AQN. 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 AQN
Butterflies on AQN are pinning bets - traders use them when they expect AQN 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.
AQN thesis for this butterfly
The market-implied 1-standard-deviation range for AQN extends from approximately $5.11 on the downside to $6.65 on the upside. A AQN long call butterfly is a pinning play: it pays maximum at the middle strike if AQN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AQN IV rank near 24.45% 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 AQN at 45.50%. As a Utilities name, AQN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AQN-specific events.
AQN 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. AQN positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AQN alongside the broader basket even when AQN-specific fundamentals are unchanged. Always rebuild the position from current AQN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AQN?
- A butterfly on AQN is the butterfly strategy applied to AQN (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 AQN stock trading near $5.88, the strikes shown on this page are snapped to the nearest listed AQN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AQN 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 AQN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 45.50%), 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 AQN butterfly?
- The breakeven for the AQN 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 AQN market-implied 1-standard-deviation expected move is approximately 13.04%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AQN?
- Butterflies on AQN are pinning bets - traders use them when they expect AQN 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 AQN implied volatility affect this butterfly?
- AQN ATM IV is at 45.50% with IV rank near 24.45%, 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.