ARQT Butterfly Strategy
ARQT (Arcutis Biotherapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Arcutis Biotherapeutics, Inc. is a biopharmaceutical firm dedicated to developing and marketing therapies for a range of skin-related diseases. The company's flagship investigational compound, ARQ-151, a roflumilast cream administered topically, has successfully concluded late-stage clinical development for treating both plaque psoriasis and atopic dermatitis. Beyond its lead asset, Arcutis's pipeline includes several other promising compounds. Among these is ARQ-154, a roflumilast foam applied topically, aimed at seborrheic dermatitis and scalp psoriasis. Furthermore, ARQ-252, a topical selective Janus kinase type 1 (JAK1) inhibitor, is under investigation for hand eczema and vitiligo. ARQ-255, a variation of ARQ-252 designed for deeper dermal absorption, is being explored for alopecia areata.
ARQT (Arcutis Biotherapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $3.38B, a beta of 1.52 versus the broader market, a 52-week range of 13.06-31.77, average daily share volume of 1.7M, a public-listing history dating back to 2020, approximately 342 full-time employees. These structural characteristics shape how ARQT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.52 indicates ARQT 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 ARQT?
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 ARQT snapshot
As of June 30, 2026, spot at $26.06, ATM IV 52.80%, IV rank 9.63%, expected move 15.14%. The butterfly on ARQT 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 ARQT specifically: ARQT IV at 52.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a ARQT butterfly, with a market-implied 1-standard-deviation move of approximately 15.14% (roughly $3.94 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 ARQT expiries trade a higher absolute premium for lower per-day decay. Position sizing on ARQT should anchor to the underlying notional of $26.06 per share and to the trader's directional view on ARQT stock.
ARQT butterfly setup
The ARQT 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 ARQT near $26.06, the first option leg uses a $24.76 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ARQT 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 ARQT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $24.76 | N/A |
| Sell 2 | Call | $26.06 | N/A |
| Buy 1 | Call | $27.36 | N/A |
ARQT 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.
ARQT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ARQT. 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 ARQT
Butterflies on ARQT are pinning bets - traders use them when they expect ARQT 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.
ARQT thesis for this butterfly
The market-implied 1-standard-deviation range for ARQT extends from approximately $22.12 on the downside to $30.00 on the upside. A ARQT long call butterfly is a pinning play: it pays maximum at the middle strike if ARQT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ARQT IV rank near 9.63% 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 ARQT at 52.80%. As a Healthcare name, ARQT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ARQT-specific events.
ARQT 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. ARQT positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ARQT alongside the broader basket even when ARQT-specific fundamentals are unchanged. Always rebuild the position from current ARQT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ARQT?
- A butterfly on ARQT is the butterfly strategy applied to ARQT (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 ARQT stock trading near $26.06, the strikes shown on this page are snapped to the nearest listed ARQT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ARQT 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 ARQT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 52.80%), 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 ARQT butterfly?
- The breakeven for the ARQT 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 ARQT market-implied 1-standard-deviation expected move is approximately 15.14%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ARQT?
- Butterflies on ARQT are pinning bets - traders use them when they expect ARQT 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 ARQT implied volatility affect this butterfly?
- ARQT ATM IV is at 52.80% with IV rank near 9.63%, 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.