CDZI Butterfly Strategy
CDZI (Cadiz Inc.), in the Utilities sector, (Regulated Water industry), listed on NASDAQ.
Cadiz Inc., together with its subsidiaries, operates as a natural resources development company in the United States. It engages in the water resource and agricultural development activities in San Bernardino County properties. The company owns approximately 35,000 acres of land in the Cadiz and Fenner valleys of eastern San Bernardino County; and approximately 11,000 acres of land in the eastern Mojave Desert portion of San Bernardino County. It is also involved in the cultivation of lemons, and spring and fall plantings of vegetables and grains. Cadiz Inc. was founded in 1983 and is headquartered in Los Angeles, California.
CDZI (Cadiz Inc.) trades in the Utilities sector, specifically Regulated Water, with a market capitalization of approximately $392.6M, a beta of 1.79 versus the broader market, a 52-week range of 2.58-6.96, average daily share volume of 681K, a public-listing history dating back to 1989, approximately 25 full-time employees. These structural characteristics shape how CDZI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.79 indicates CDZI 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 CDZI?
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 CDZI snapshot
As of May 15, 2026, spot at $4.13, ATM IV 99.50%, IV rank 35.51%, expected move 28.53%. The butterfly on CDZI 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 CDZI specifically: CDZI IV at 99.50% 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 28.53% (roughly $1.18 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 CDZI expiries trade a higher absolute premium for lower per-day decay. Position sizing on CDZI should anchor to the underlying notional of $4.13 per share and to the trader's directional view on CDZI stock.
CDZI butterfly setup
The CDZI 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 CDZI near $4.13, the first option leg uses a $3.92 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CDZI 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 CDZI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.92 | N/A |
| Sell 2 | Call | $4.13 | N/A |
| Buy 1 | Call | $4.34 | N/A |
CDZI 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.
CDZI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CDZI. 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 CDZI
Butterflies on CDZI are pinning bets - traders use them when they expect CDZI 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.
CDZI thesis for this butterfly
The market-implied 1-standard-deviation range for CDZI extends from approximately $2.95 on the downside to $5.31 on the upside. A CDZI long call butterfly is a pinning play: it pays maximum at the middle strike if CDZI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CDZI IV rank near 35.51% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CDZI should anchor more to the directional view and the expected-move geometry. As a Utilities name, CDZI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CDZI-specific events.
CDZI 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. CDZI positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CDZI alongside the broader basket even when CDZI-specific fundamentals are unchanged. Always rebuild the position from current CDZI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CDZI?
- A butterfly on CDZI is the butterfly strategy applied to CDZI (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 CDZI stock trading near $4.13, the strikes shown on this page are snapped to the nearest listed CDZI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CDZI 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 CDZI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 99.50%), 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 CDZI butterfly?
- The breakeven for the CDZI 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 CDZI market-implied 1-standard-deviation expected move is approximately 28.53%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CDZI?
- Butterflies on CDZI are pinning bets - traders use them when they expect CDZI 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 CDZI implied volatility affect this butterfly?
- CDZI ATM IV is at 99.50% with IV rank near 35.51%, 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.