BHB Butterfly Strategy
BHB (Bar Harbor Bankshares), in the Financial Services sector, (Banks - Regional industry), listed on AMEX.
Bar Harbor Bankshares acts as the parent organization for Bar Harbor Bank & Trust, which delivers a full spectrum of banking services covering commercial, retail, lending, and wealth management. The bank offers a variety of deposit products, including both interest-bearing and non-interest-bearing checking accounts, savings accounts, money market accounts, time deposits, and certificates of deposit (CDs). Its lending activities cover multiple areas: commercial real estate, providing financing for multi-family dwellings, construction projects, land development, and other business properties; commercial and industrial loans extended to agricultural and various commercial entities, including those with tax-exempt status; residential real estate loans, primarily in the form of mortgages for 1-4 unit homes; and consumer loans, which include home equity loans and lines of credit, auto loans, and other installment financing. Beyond core banking, Bar Harbor Bank & Trust supplies life insurance, annuity, and retirement planning products, alongside general financial planning advice. It also assists clients with third-party investment and insurance solutions. Furthermore, the institution's wealth management division offers trust and estate administration, extensive wealth advisory, and investment management services designed for individuals, businesses, non-profit organizations, and local municipalities.
BHB (Bar Harbor Bankshares) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $654.1M, a trailing P/E of 16.24, a beta of 0.61 versus the broader market, a 52-week range of 28.06-39.67, average daily share volume of 105K, a public-listing history dating back to 1997, approximately 458 full-time employees. These structural characteristics shape how BHB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.61 indicates BHB has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BHB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on BHB?
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 BHB snapshot
As of June 30, 2026, spot at $37.78, ATM IV 58.70%, IV rank 12.02%, expected move 16.83%. The butterfly on BHB 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 BHB specifically: BHB IV at 58.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a BHB butterfly, with a market-implied 1-standard-deviation move of approximately 16.83% (roughly $6.36 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 BHB expiries trade a higher absolute premium for lower per-day decay. Position sizing on BHB should anchor to the underlying notional of $37.78 per share and to the trader's directional view on BHB stock.
BHB butterfly setup
The BHB 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 BHB near $37.78, the first option leg uses a $35.89 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BHB 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 BHB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $35.89 | N/A |
| Sell 2 | Call | $37.78 | N/A |
| Buy 1 | Call | $39.67 | N/A |
BHB 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.
BHB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on BHB. 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 BHB
Butterflies on BHB are pinning bets - traders use them when they expect BHB 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.
BHB thesis for this butterfly
The market-implied 1-standard-deviation range for BHB extends from approximately $31.42 on the downside to $44.14 on the upside. A BHB long call butterfly is a pinning play: it pays maximum at the middle strike if BHB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BHB IV rank near 12.02% 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 BHB at 58.70%. As a Financial Services name, BHB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BHB-specific events.
BHB 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. BHB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BHB alongside the broader basket even when BHB-specific fundamentals are unchanged. Always rebuild the position from current BHB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on BHB?
- A butterfly on BHB is the butterfly strategy applied to BHB (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 BHB stock trading near $37.78, the strikes shown on this page are snapped to the nearest listed BHB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BHB 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 BHB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 58.70%), 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 BHB butterfly?
- The breakeven for the BHB 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 BHB market-implied 1-standard-deviation expected move is approximately 16.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on BHB?
- Butterflies on BHB are pinning bets - traders use them when they expect BHB 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 BHB implied volatility affect this butterfly?
- BHB ATM IV is at 58.70% with IV rank near 12.02%, 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.