ARQ Butterfly Strategy
ARQ (Arq, Inc.), in the Industrials sector, (Industrial - Pollution & Treatment Controls industry), listed on NASDAQ.
Operating throughout North America, Arq, Inc. is a specialized manufacturer of activated carbon materials. Their product range encompasses various types of activated carbon, specifically granular, powdered, and colloidal forms. Additionally, they provide Arq Powder Wetcake, which is a finely processed, low-ash particle originating from coal waste, along with additives formulated for managing air pollution. These versatile products find application in numerous sectors, including water purification, remediation of contaminated groundwater, enhancing soil composition, controlling atmospheric discharges, and as components in asphalt mixtures. Established in 1996, the company rebranded as Arq, Inc. in February 2024, having previously been known as Advanced Emissions Solutions, Inc. Its corporate headquarters are located in Greenwood Village, Colorado.
ARQ (Arq, Inc.) trades in the Industrials sector, specifically Industrial - Pollution & Treatment Controls, with a market capitalization of approximately $98.7M, a beta of 2.85 versus the broader market, a 52-week range of 1.54-7.82, average daily share volume of 350K, a public-listing history dating back to 2004, approximately 202 full-time employees. These structural characteristics shape how ARQ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.85 indicates ARQ has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. ARQ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ARQ?
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.
ARQ snapshot
As of August 14, 2026, spot at $2.30, ATM IV 117.60%, IV rank 20.71%, expected move 33.71%. The butterfly on ARQ below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on ARQ specifically: ARQ IV at 117.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a ARQ butterfly, with a market-implied 1-standard-deviation move of approximately 33.71% (roughly $0.78 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ARQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on ARQ should anchor to the underlying notional of $2.30 per share and to the trader's directional view on ARQ stock.
ARQ butterfly setup
The ARQ 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 ARQ at $2.30 on that close, the first option leg uses a $2.18 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ARQ chain at a 35-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 ARQ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $2.18 | N/A |
| Sell 2 | Call | $2.30 | N/A |
| Buy 1 | Call | $2.42 | N/A |
ARQ 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.
ARQ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ARQ. 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 ARQ
Butterflies on ARQ are pinning bets - traders use them when they expect ARQ 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.
ARQ thesis for this butterfly
The market-implied 1-standard-deviation range for ARQ extends from approximately $1.52 on the downside to $3.08 on the upside. A ARQ long call butterfly is a pinning play: it pays maximum at the middle strike if ARQ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ARQ IV rank near 20.71% 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 ARQ at 117.60%. As a Industrials name, ARQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ARQ-specific events.
ARQ 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. ARQ positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ARQ alongside the broader basket even when ARQ-specific fundamentals are unchanged. Always rebuild the position from current ARQ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ARQ?
- A butterfly on ARQ is the butterfly strategy applied to ARQ (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 ARQ stock at $2.30 on the most recent close, the strikes shown on this page are snapped to the nearest listed ARQ chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ARQ 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 ARQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 117.60%), 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 ARQ butterfly?
- The breakeven for the ARQ butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The ARQ market-implied 1-standard-deviation expected move in the same options snapshot is approximately 33.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ARQ?
- Butterflies on ARQ are pinning bets - traders use them when they expect ARQ 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 ARQ implied volatility affect this butterfly?
- ARQ ATM IV is at 117.60% with IV rank near 20.71%, 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.