BHR Butterfly Strategy
BHR (Braemar Hotels & Resorts Inc.), in the Real Estate sector, (REIT - Hotel & Motel industry), listed on NYSE.
Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.
BHR (Braemar Hotels & Resorts Inc.) trades in the Real Estate sector, specifically REIT - Hotel & Motel, with a market capitalization of approximately $173.8M, a beta of 0.79 versus the broader market, a 52-week range of 1.96-3.19, average daily share volume of 396K, a public-listing history dating back to 2013, approximately 116 full-time employees. These structural characteristics shape how BHR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.79 places BHR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. BHR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on BHR?
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 BHR snapshot
As of May 15, 2026, spot at $2.50, ATM IV 135.50%, IV rank 29.07%, expected move 38.85%. The butterfly on BHR 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 34-day expiry.
Why this butterfly structure on BHR specifically: BHR IV at 135.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a BHR butterfly, with a market-implied 1-standard-deviation move of approximately 38.85% (roughly $0.97 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BHR expiries trade a higher absolute premium for lower per-day decay. Position sizing on BHR should anchor to the underlying notional of $2.50 per share and to the trader's directional view on BHR stock.
BHR butterfly setup
The BHR 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 BHR near $2.50, the first option leg uses a $2.38 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BHR chain at a 34-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 BHR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $2.38 | N/A |
| Sell 2 | Call | $2.50 | N/A |
| Buy 1 | Call | $2.63 | N/A |
BHR 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.
BHR butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on BHR. 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 BHR
Butterflies on BHR are pinning bets - traders use them when they expect BHR 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.
BHR thesis for this butterfly
The market-implied 1-standard-deviation range for BHR extends from approximately $1.53 on the downside to $3.47 on the upside. A BHR long call butterfly is a pinning play: it pays maximum at the middle strike if BHR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BHR IV rank near 29.07% 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 BHR at 135.50%. As a Real Estate name, BHR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BHR-specific events.
BHR 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. BHR positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BHR alongside the broader basket even when BHR-specific fundamentals are unchanged. Always rebuild the position from current BHR chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on BHR?
- A butterfly on BHR is the butterfly strategy applied to BHR (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 BHR stock trading near $2.50, the strikes shown on this page are snapped to the nearest listed BHR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BHR 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 BHR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 135.50%), 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 BHR butterfly?
- The breakeven for the BHR 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 BHR market-implied 1-standard-deviation expected move is approximately 38.85%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on BHR?
- Butterflies on BHR are pinning bets - traders use them when they expect BHR 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 BHR implied volatility affect this butterfly?
- BHR ATM IV is at 135.50% with IV rank near 29.07%, 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.