CD Butterfly Strategy
CD (Chaince Digital Holdings Inc.), in the Technology sector, (Information Technology Services industry), listed on NASDAQ.
Chaince Digital Holdings Inc., a digital fintech company, provides access to the AI-powered infrastructure, blockchain, and digital assets in the United States. The company offers blockchain and digital asset solutions; and AI and HPC infrastructure, as well as liquid cooling solutions for AI data centers. It also provides broker-dealer, and investment advisory services. The company was formerly known as Mercurity Fintech Holding Inc. and changed its name to Chaince Digital Holdings Inc. in November 2025. Chaince Digital Holdings Inc. was incorporated in 2011 and is headquartered in New York, New York.
CD (Chaince Digital Holdings Inc.) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $490.0M, a beta of 8.20 versus the broader market, a 52-week range of 1.38-36.77, average daily share volume of 132K, a public-listing history dating back to 2015, approximately 11 full-time employees. These structural characteristics shape how CD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 8.20 indicates CD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on CD?
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 CD snapshot
As of May 15, 2026, spot at $8.13, ATM IV 71.80%, IV rank 16.34%, expected move 20.58%. The butterfly on CD 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 CD specifically: CD IV at 71.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a CD butterfly, with a market-implied 1-standard-deviation move of approximately 20.58% (roughly $1.67 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 CD expiries trade a higher absolute premium for lower per-day decay. Position sizing on CD should anchor to the underlying notional of $8.13 per share and to the trader's directional view on CD stock.
CD butterfly setup
The CD 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 CD near $8.13, the first option leg uses a $7.72 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CD 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 CD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $7.72 | N/A |
| Sell 2 | Call | $8.13 | N/A |
| Buy 1 | Call | $8.54 | N/A |
CD 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.
CD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CD. 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 CD
Butterflies on CD are pinning bets - traders use them when they expect CD 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.
CD thesis for this butterfly
The market-implied 1-standard-deviation range for CD extends from approximately $6.46 on the downside to $9.80 on the upside. A CD long call butterfly is a pinning play: it pays maximum at the middle strike if CD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CD IV rank near 16.34% 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 CD at 71.80%. As a Technology name, CD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CD-specific events.
CD 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. CD positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CD alongside the broader basket even when CD-specific fundamentals are unchanged. Always rebuild the position from current CD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CD?
- A butterfly on CD is the butterfly strategy applied to CD (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 CD stock trading near $8.13, the strikes shown on this page are snapped to the nearest listed CD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CD 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 CD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 71.80%), 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 CD butterfly?
- The breakeven for the CD 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 CD market-implied 1-standard-deviation expected move is approximately 20.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CD?
- Butterflies on CD are pinning bets - traders use them when they expect CD 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 CD implied volatility affect this butterfly?
- CD ATM IV is at 71.80% with IV rank near 16.34%, 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.