AX Butterfly Strategy
AX (Axos Financial, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
Axos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through Banking Business and Securities Business segments. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate term unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text messaging banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers.
AX (Axos Financial, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $4.71B, a trailing P/E of 9.84, a beta of 1.30 versus the broader market, a 52-week range of 67.5-101.92, average daily share volume of 414K, a public-listing history dating back to 2005, approximately 2K full-time employees. These structural characteristics shape how AX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 indicates AX has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 9.84 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on AX?
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 AX snapshot
As of May 15, 2026, spot at $83.08, ATM IV 34.20%, IV rank 27.44%, expected move 9.80%. The butterfly on AX 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 63-day expiry.
Why this butterfly structure on AX specifically: AX IV at 34.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a AX butterfly, with a market-implied 1-standard-deviation move of approximately 9.80% (roughly $8.15 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AX expiries trade a higher absolute premium for lower per-day decay. Position sizing on AX should anchor to the underlying notional of $83.08 per share and to the trader's directional view on AX stock.
AX butterfly setup
The AX 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 AX near $83.08, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AX chain at a 63-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 AX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $6.75 |
| Sell 2 | Call | $82.50 | $5.25 |
| Buy 1 | Call | $87.50 | $2.93 |
AX butterfly risk and reward
- Net Premium / Debit
- +$82.50
- Max Profit (per contract)
- $315.75
- Max Loss (per contract)
- -$167.50
- Breakeven(s)
- $85.83
- Risk / Reward Ratio
- 1.885
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.
AX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AX. 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% | +$82.50 |
| $18.38 | -77.9% | +$82.50 |
| $36.75 | -55.8% | +$82.50 |
| $55.12 | -33.7% | +$82.50 |
| $73.48 | -11.6% | +$82.50 |
| $91.85 | +10.6% | -$167.50 |
| $110.22 | +32.7% | -$167.50 |
| $128.59 | +54.8% | -$167.50 |
| $146.96 | +76.9% | -$167.50 |
| $165.33 | +99.0% | -$167.50 |
When traders use butterfly on AX
Butterflies on AX are pinning bets - traders use them when they expect AX 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.
AX thesis for this butterfly
The market-implied 1-standard-deviation range for AX extends from approximately $74.93 on the downside to $91.23 on the upside. A AX long call butterfly is a pinning play: it pays maximum at the middle strike if AX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AX IV rank near 27.44% 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 AX at 34.20%. As a Financial Services name, AX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AX-specific events.
AX 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. AX positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AX alongside the broader basket even when AX-specific fundamentals are unchanged. Always rebuild the position from current AX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AX?
- A butterfly on AX is the butterfly strategy applied to AX (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 AX stock trading near $83.08, the strikes shown on this page are snapped to the nearest listed AX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AX 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 AX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.20%), the computed maximum profit is $315.75 per contract and the computed maximum loss is -$167.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AX butterfly?
- The breakeven for the AX butterfly priced on this page is roughly $85.83 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 AX market-implied 1-standard-deviation expected move is approximately 9.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AX?
- Butterflies on AX are pinning bets - traders use them when they expect AX 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 AX implied volatility affect this butterfly?
- AX ATM IV is at 34.20% with IV rank near 27.44%, 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.