BKU Butterfly Strategy
BKU (BankUnited, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
BankUnited, Inc. serves as the holding company for BankUnited, its national banking subsidiary, which delivers a comprehensive array of financial services throughout the United States. The company's product suite includes various deposit options such as checking, money market, and savings accounts, as well as certificates of deposit. It also extends services like treasury management, commercial payments, and cash management solutions. Its extensive loan portfolio covers diverse commercial financing, including equipment loans, both secured and unsecured lines of credit, formula-based lending, and financing for owner-occupied commercial real estate (term loans and lines). Other commercial offerings include mortgage warehouse facilities, letters of credit, commercial credit cards, and specialized funding through the Small Business Administration (SBA), U.S. Department of Agriculture (USDA), and Export-Import Bank (Ex-Im Bank).
BKU (BankUnited, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $3.58B, a trailing P/E of 13.80, a beta of 1.18 versus the broader market, a 52-week range of 34.79-52.11, average daily share volume of 827K, a public-listing history dating back to 2011, approximately 2K full-time employees. These structural characteristics shape how BKU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.18 places BKU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. BKU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on BKU?
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 BKU snapshot
As of June 30, 2026, spot at $48.32, ATM IV 30.70%, IV rank 4.21%, expected move 8.80%. The butterfly on BKU 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 BKU specifically: BKU IV at 30.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a BKU butterfly, with a market-implied 1-standard-deviation move of approximately 8.80% (roughly $4.25 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 BKU expiries trade a higher absolute premium for lower per-day decay. Position sizing on BKU should anchor to the underlying notional of $48.32 per share and to the trader's directional view on BKU stock.
BKU butterfly setup
The BKU 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 BKU near $48.32, the first option leg uses a $45.90 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BKU 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 BKU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $45.90 | N/A |
| Sell 2 | Call | $48.32 | N/A |
| Buy 1 | Call | $50.74 | N/A |
BKU 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.
BKU butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on BKU. 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 BKU
Butterflies on BKU are pinning bets - traders use them when they expect BKU 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.
BKU thesis for this butterfly
The market-implied 1-standard-deviation range for BKU extends from approximately $44.07 on the downside to $52.57 on the upside. A BKU long call butterfly is a pinning play: it pays maximum at the middle strike if BKU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BKU IV rank near 4.21% 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 BKU at 30.70%. As a Financial Services name, BKU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BKU-specific events.
BKU 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. BKU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BKU alongside the broader basket even when BKU-specific fundamentals are unchanged. Always rebuild the position from current BKU chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on BKU?
- A butterfly on BKU is the butterfly strategy applied to BKU (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 BKU stock trading near $48.32, the strikes shown on this page are snapped to the nearest listed BKU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BKU 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 BKU butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 30.70%), 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 BKU butterfly?
- The breakeven for the BKU 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 BKU market-implied 1-standard-deviation expected move is approximately 8.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on BKU?
- Butterflies on BKU are pinning bets - traders use them when they expect BKU 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 BKU implied volatility affect this butterfly?
- BKU ATM IV is at 30.70% with IV rank near 4.21%, 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.