AXTA Butterfly Strategy
AXTA (Axalta Coating Systems Ltd.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NYSE.
Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It operates through two segments, Performance Coatings and Transportation Coatings. The company offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. It also provides functional and decorative liquid, and powder coatings used in various industrial applications, including architectural cladding and fittings, automotive coatings, general industrial, job coaters, energy solutions, HVAC, appliances, industrial wood, coil, and oil and gas pipelines; and coatings for building materials, cabinet, wood and luxury vinyl flooring, and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Tufcote, and Ceranamel for liquid coatings; and Alesta, Nap-Gard, Abcite, Teodur, and Plascoat brands for powder coatings. In addition, the company develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. It also sells its product under the Audurra, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names.
AXTA (Axalta Coating Systems Ltd.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $5.97B, a trailing P/E of 16.16, a beta of 1.25 versus the broader market, a 52-week range of 24.937-35.72, average daily share volume of 2.6M, a public-listing history dating back to 2014, approximately 13K full-time employees. These structural characteristics shape how AXTA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.25 places AXTA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on AXTA?
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 AXTA snapshot
As of May 15, 2026, spot at $26.88, ATM IV 40.20%, IV rank 25.47%, expected move 11.53%. The butterfly on AXTA 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 AXTA specifically: AXTA IV at 40.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a AXTA butterfly, with a market-implied 1-standard-deviation move of approximately 11.53% (roughly $3.10 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 AXTA expiries trade a higher absolute premium for lower per-day decay. Position sizing on AXTA should anchor to the underlying notional of $26.88 per share and to the trader's directional view on AXTA stock.
AXTA butterfly setup
The AXTA 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 AXTA near $26.88, the first option leg uses a $26.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AXTA 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 AXTA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $26.00 | $2.90 |
| Sell 2 | Call | $27.00 | $2.30 |
| Buy 1 | Call | $28.00 | $1.35 |
AXTA butterfly risk and reward
- Net Premium / Debit
- +$35.00
- Max Profit (per contract)
- $132.99
- Max Loss (per contract)
- $35.00
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- 3.800
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.
AXTA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AXTA. 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% | +$35.00 |
| $5.95 | -77.9% | +$35.00 |
| $11.89 | -55.7% | +$35.00 |
| $17.84 | -33.6% | +$35.00 |
| $23.78 | -11.5% | +$35.00 |
| $29.72 | +10.6% | +$35.00 |
| $35.66 | +32.7% | +$35.00 |
| $41.61 | +54.8% | +$35.00 |
| $47.55 | +76.9% | +$35.00 |
| $53.49 | +99.0% | +$35.00 |
When traders use butterfly on AXTA
Butterflies on AXTA are pinning bets - traders use them when they expect AXTA 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.
AXTA thesis for this butterfly
The market-implied 1-standard-deviation range for AXTA extends from approximately $23.78 on the downside to $29.98 on the upside. A AXTA long call butterfly is a pinning play: it pays maximum at the middle strike if AXTA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AXTA IV rank near 25.47% 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 AXTA at 40.20%. As a Basic Materials name, AXTA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AXTA-specific events.
AXTA 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. AXTA positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AXTA alongside the broader basket even when AXTA-specific fundamentals are unchanged. Always rebuild the position from current AXTA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AXTA?
- A butterfly on AXTA is the butterfly strategy applied to AXTA (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 AXTA stock trading near $26.88, the strikes shown on this page are snapped to the nearest listed AXTA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AXTA 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 AXTA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 40.20%), the computed maximum profit is $132.99 per contract and the computed maximum loss is $35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AXTA butterfly?
- The breakeven for the AXTA 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 AXTA market-implied 1-standard-deviation expected move is approximately 11.53%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AXTA?
- Butterflies on AXTA are pinning bets - traders use them when they expect AXTA 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 AXTA implied volatility affect this butterfly?
- AXTA ATM IV is at 40.20% with IV rank near 25.47%, 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.