CNK Butterfly Strategy
CNK (Cinemark Holdings, Inc.), in the Communication Services sector, (Entertainment industry), listed on NYSE.
Cinemark Holdings, Inc., together with its subsidiaries, engages in the motion picture exhibition business. As of June 30, 2022, it operated 522 theatres with 5,868 screens in the United States, and South and Central America. The company was founded in 1984 and is headquartered in Plano, Texas.
CNK (Cinemark Holdings, Inc.) trades in the Communication Services sector, specifically Entertainment, with a market capitalization of approximately $3.07B, a trailing P/E of 17.73, a beta of 1.04 versus the broader market, a 52-week range of 21.6-34.01, average daily share volume of 2.3M, a public-listing history dating back to 2007, approximately 9K full-time employees. These structural characteristics shape how CNK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.04 places CNK roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CNK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on CNK?
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 CNK snapshot
As of May 15, 2026, spot at $25.91, ATM IV 35.40%, IV rank 25.20%, expected move 10.15%. The butterfly on CNK 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 CNK specifically: CNK IV at 35.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a CNK butterfly, with a market-implied 1-standard-deviation move of approximately 10.15% (roughly $2.63 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 CNK expiries trade a higher absolute premium for lower per-day decay. Position sizing on CNK should anchor to the underlying notional of $25.91 per share and to the trader's directional view on CNK stock.
CNK butterfly setup
The CNK 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 CNK near $25.91, the first option leg uses a $25.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CNK 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 CNK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $25.00 | $1.68 |
| Sell 2 | Call | $26.00 | $1.08 |
| Buy 1 | Call | $27.00 | $0.68 |
CNK butterfly risk and reward
- Net Premium / Debit
- -$20.00
- Max Profit (per contract)
- $75.48
- Max Loss (per contract)
- -$20.00
- Breakeven(s)
- $25.20, $26.80
- Risk / Reward Ratio
- 3.774
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.
CNK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CNK. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$20.00 |
| $5.74 | -77.9% | -$20.00 |
| $11.47 | -55.7% | -$20.00 |
| $17.19 | -33.6% | -$20.00 |
| $22.92 | -11.5% | -$20.00 |
| $28.65 | +10.6% | -$20.00 |
| $34.38 | +32.7% | -$20.00 |
| $40.10 | +54.8% | -$20.00 |
| $45.83 | +76.9% | -$20.00 |
| $51.56 | +99.0% | -$20.00 |
When traders use butterfly on CNK
Butterflies on CNK are pinning bets - traders use them when they expect CNK 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.
CNK thesis for this butterfly
The market-implied 1-standard-deviation range for CNK extends from approximately $23.28 on the downside to $28.54 on the upside. A CNK long call butterfly is a pinning play: it pays maximum at the middle strike if CNK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CNK IV rank near 25.20% 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 CNK at 35.40%. As a Communication Services name, CNK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CNK-specific events.
CNK 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. CNK positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CNK alongside the broader basket even when CNK-specific fundamentals are unchanged. Always rebuild the position from current CNK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CNK?
- A butterfly on CNK is the butterfly strategy applied to CNK (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 CNK stock trading near $25.91, the strikes shown on this page are snapped to the nearest listed CNK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CNK 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 CNK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 35.40%), the computed maximum profit is $75.48 per contract and the computed maximum loss is -$20.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CNK butterfly?
- The breakeven for the CNK butterfly priced on this page is roughly $25.20 and $26.80 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 CNK market-implied 1-standard-deviation expected move is approximately 10.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CNK?
- Butterflies on CNK are pinning bets - traders use them when they expect CNK 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 CNK implied volatility affect this butterfly?
- CNK ATM IV is at 35.40% with IV rank near 25.20%, 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.