BMEA Butterfly Strategy
BMEA (Biomea Fusion, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Biomea Fusion, Inc., a biopharmaceutical company, focuses on the discovery and development of covalent small molecule drugs to treat patients with genetically defined cancers and metabolic diseases. Its lead product candidate is BMF-219, an orally bioavailable, potent, and selective covalent inhibitor of menin, a transcriptional regulator in oncogenic signaling in multiple cancers. The company was incorporated in 2017 and is headquartered in Redwood City, California.
BMEA (Biomea Fusion, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $88.1M, a beta of -0.34 versus the broader market, a 52-week range of 0.872-3.08, average daily share volume of 1.5M, a public-listing history dating back to 2021, approximately 79 full-time employees. These structural characteristics shape how BMEA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.34 indicates BMEA has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on BMEA?
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 BMEA snapshot
As of May 15, 2026, spot at $1.33, ATM IV 181.80%, IV rank 37.32%, expected move 52.12%. The butterfly on BMEA 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 BMEA specifically: BMEA IV at 181.80% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 52.12% (roughly $0.69 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 BMEA expiries trade a higher absolute premium for lower per-day decay. Position sizing on BMEA should anchor to the underlying notional of $1.33 per share and to the trader's directional view on BMEA stock.
BMEA butterfly setup
The BMEA 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 BMEA near $1.33, the first option leg uses a $1.26 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BMEA 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 BMEA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.26 | N/A |
| Sell 2 | Call | $1.33 | N/A |
| Buy 1 | Call | $1.40 | N/A |
BMEA 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.
BMEA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on BMEA. 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 BMEA
Butterflies on BMEA are pinning bets - traders use them when they expect BMEA 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.
BMEA thesis for this butterfly
The market-implied 1-standard-deviation range for BMEA extends from approximately $0.64 on the downside to $2.02 on the upside. A BMEA long call butterfly is a pinning play: it pays maximum at the middle strike if BMEA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BMEA IV rank near 37.32% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on BMEA should anchor more to the directional view and the expected-move geometry. As a Healthcare name, BMEA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BMEA-specific events.
BMEA 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. BMEA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BMEA alongside the broader basket even when BMEA-specific fundamentals are unchanged. Always rebuild the position from current BMEA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on BMEA?
- A butterfly on BMEA is the butterfly strategy applied to BMEA (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 BMEA stock trading near $1.33, the strikes shown on this page are snapped to the nearest listed BMEA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BMEA 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 BMEA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 181.80%), 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 BMEA butterfly?
- The breakeven for the BMEA 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 BMEA market-implied 1-standard-deviation expected move is approximately 52.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on BMEA?
- Butterflies on BMEA are pinning bets - traders use them when they expect BMEA 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 BMEA implied volatility affect this butterfly?
- BMEA ATM IV is at 181.80% with IV rank near 37.32%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.