CGC Butterfly Strategy
CGC (Canopy Growth Corporation), in the Healthcare sector, (Drug Manufacturers - Specialty & Generic industry), listed on NASDAQ.
Canopy Growth Corporation, together with its subsidiaries, engages in the production, distribution, and sale of cannabis and hemp-based products for recreational and medical purposes primarily in Canada, the United States, and Germany. It operates through two segments, Global Cannabis and Other Consumer Products. The company's products include dried cannabis flower, extracts and concentrates, beverages, gummies, and vapes. It offers its products under the Tweed, 7ACRES, 7ACRES Craft Collective, DOJA, Ace Valley, Quatreau, Deep Space, First + Free, Surity Pro, Spectrum Therapeutics, Vert, Tokyo Smoke, Twd, Martha Stewart CBD, DNA Genetics, BioSteel, Storz & Bickel, This Works, HiWay, Simple Stash, Whisl, and Truverra brands. The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. Canopy Growth Corporation was incorporated in 2009 and is headquartered in Smiths Falls, Canada.
CGC (Canopy Growth Corporation) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $464.2M, a beta of 2.39 versus the broader market, a 52-week range of 0.844-2.38, average daily share volume of 10.2M, a public-listing history dating back to 2014, approximately 1K full-time employees. These structural characteristics shape how CGC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.39 indicates CGC 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 CGC?
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 CGC snapshot
As of May 15, 2026, spot at $1.02, ATM IV 111.33%, IV rank 41.08%, expected move 31.92%. The butterfly on CGC 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 28-day expiry.
Why this butterfly structure on CGC specifically: CGC IV at 111.33% 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 31.92% (roughly $0.33 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CGC expiries trade a higher absolute premium for lower per-day decay. Position sizing on CGC should anchor to the underlying notional of $1.02 per share and to the trader's directional view on CGC stock.
CGC butterfly setup
The CGC 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 CGC near $1.02, the first option leg uses a $0.97 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CGC chain at a 28-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 CGC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.97 | N/A |
| Sell 2 | Call | $1.02 | N/A |
| Buy 1 | Call | $1.07 | N/A |
CGC 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.
CGC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CGC. 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 CGC
Butterflies on CGC are pinning bets - traders use them when they expect CGC 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.
CGC thesis for this butterfly
The market-implied 1-standard-deviation range for CGC extends from approximately $0.69 on the downside to $1.35 on the upside. A CGC long call butterfly is a pinning play: it pays maximum at the middle strike if CGC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CGC IV rank near 41.08% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CGC should anchor more to the directional view and the expected-move geometry. As a Healthcare name, CGC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CGC-specific events.
CGC 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. CGC positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CGC alongside the broader basket even when CGC-specific fundamentals are unchanged. Always rebuild the position from current CGC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CGC?
- A butterfly on CGC is the butterfly strategy applied to CGC (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 CGC stock trading near $1.02, the strikes shown on this page are snapped to the nearest listed CGC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CGC 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 CGC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 111.33%), 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 CGC butterfly?
- The breakeven for the CGC 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 CGC market-implied 1-standard-deviation expected move is approximately 31.92%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CGC?
- Butterflies on CGC are pinning bets - traders use them when they expect CGC 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 CGC implied volatility affect this butterfly?
- CGC ATM IV is at 111.33% with IV rank near 41.08%, 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.