CEVA Butterfly Strategy
CEVA (CEVA, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
CEVA, Inc. is a global provider of intellectual property (IP) for advanced wireless connectivity and intelligent sensing solutions, serving semiconductor manufacturers and original equipment manufacturers (OEMs). The company specializes in developing and licensing a broad range of digital signal processors (DSPs), AI accelerators, wireless communication platforms, and complementary software. These offerings are engineered to support applications such as sensor data integration, image enhancement, machine vision, voice command processing, and artificial intelligence. CEVA's extensive IP portfolio features DSP-driven platforms for 5G baseband processing in mobile, IoT, and infrastructure environments, alongside sophisticated imaging and computer vision capabilities for all camera-enabled devices. They also offer ultra-low power audio, voice, and speech processing, including always-on sensing functionalities for a wide spectrum of IoT markets. Furthermore, their solutions include sensor fusion software and Inertial Measurement Unit (IMU) technologies, specifically designed for hearables, wearables, augmented/virtual reality (AR/VR) systems, personal computers, robotics, remote controls, and other IoT applications.
CEVA (CEVA, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $1.18B, a beta of 2.01 versus the broader market, a 52-week range of 17.02-51.6, average daily share volume of 812K, a public-listing history dating back to 2002, approximately 406 full-time employees. These structural characteristics shape how CEVA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.01 indicates CEVA 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 CEVA?
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 CEVA snapshot
As of June 30, 2026, spot at $47.65, ATM IV 102.80%, IV rank 62.33%, expected move 29.47%. The butterfly on CEVA 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 CEVA specifically: CEVA IV at 102.80% 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 29.47% (roughly $14.04 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 CEVA expiries trade a higher absolute premium for lower per-day decay. Position sizing on CEVA should anchor to the underlying notional of $47.65 per share and to the trader's directional view on CEVA stock.
CEVA butterfly setup
The CEVA 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 CEVA near $47.65, the first option leg uses a $45.27 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CEVA 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 CEVA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $45.27 | N/A |
| Sell 2 | Call | $47.65 | N/A |
| Buy 1 | Call | $50.03 | N/A |
CEVA 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.
CEVA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CEVA. 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 CEVA
Butterflies on CEVA are pinning bets - traders use them when they expect CEVA 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.
CEVA thesis for this butterfly
The market-implied 1-standard-deviation range for CEVA extends from approximately $33.61 on the downside to $61.69 on the upside. A CEVA long call butterfly is a pinning play: it pays maximum at the middle strike if CEVA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CEVA IV rank near 62.33% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CEVA should anchor more to the directional view and the expected-move geometry. As a Technology name, CEVA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CEVA-specific events.
CEVA 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. CEVA positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CEVA alongside the broader basket even when CEVA-specific fundamentals are unchanged. Always rebuild the position from current CEVA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CEVA?
- A butterfly on CEVA is the butterfly strategy applied to CEVA (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 CEVA stock trading near $47.65, the strikes shown on this page are snapped to the nearest listed CEVA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CEVA 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 CEVA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 102.80%), 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 CEVA butterfly?
- The breakeven for the CEVA 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 CEVA market-implied 1-standard-deviation expected move is approximately 29.47%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CEVA?
- Butterflies on CEVA are pinning bets - traders use them when they expect CEVA 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 CEVA implied volatility affect this butterfly?
- CEVA ATM IV is at 102.80% with IV rank near 62.33%, 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.