COLL Butterfly Strategy
COLL (Collegium Pharmaceutical, Inc.), in the Healthcare sector, (Drug Manufacturers - Specialty & Generic industry), listed on NASDAQ.
Collegium Pharmaceutical, Inc. (COLL) is a specialized pharmaceutical firm dedicated to the development and marketing of medications for pain management. Its diverse product lineup features significant therapies aimed at addressing various pain conditions. A prominent offering is Xtampza ER, an extended-release, oral formulation of oxycodone, specifically engineered with properties to deter abuse. This particular drug is prescribed for patients experiencing severe, persistent pain that necessitates daily, continuous, long-term opioid therapy. The company's portfolio also encompasses Nucynta ER and Nucynta IR, which are extended-release and immediate-release versions of tapentadol, respectively. Founded in 2002, the enterprise initially operated under the name Collegium Pharmaceuticals, Inc., before officially adopting its current identity as Collegium Pharmaceutical, Inc. in October 2003.
COLL (Collegium Pharmaceutical, Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $833.5M, a trailing P/E of 17.41, a beta of 0.76 versus the broader market, a 52-week range of 25.47-50.787, average daily share volume of 468K, a public-listing history dating back to 2015, approximately 423 full-time employees. These structural characteristics shape how COLL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.76 places COLL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on COLL?
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.
COLL snapshot
As of August 14, 2026, spot at $28.24, ATM IV 50.00%, IV rank 7.76%, expected move 14.33%. The butterfly on COLL below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on COLL specifically: COLL IV at 50.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a COLL butterfly, with a market-implied 1-standard-deviation move of approximately 14.33% (roughly $4.05 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated COLL expiries trade a higher absolute premium for lower per-day decay. Position sizing on COLL should anchor to the underlying notional of $28.24 per share and to the trader's directional view on COLL stock.
COLL butterfly setup
The COLL 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 COLL at $28.24 on that close, the first option leg uses a $26.83 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed COLL chain at a 35-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 COLL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $26.83 | N/A |
| Sell 2 | Call | $28.24 | N/A |
| Buy 1 | Call | $29.65 | N/A |
COLL 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.
COLL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on COLL. 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 COLL
Butterflies on COLL are pinning bets - traders use them when they expect COLL 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.
COLL thesis for this butterfly
The market-implied 1-standard-deviation range for COLL extends from approximately $24.19 on the downside to $32.29 on the upside. A COLL long call butterfly is a pinning play: it pays maximum at the middle strike if COLL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current COLL IV rank near 7.76% 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 COLL at 50.00%. As a Healthcare name, COLL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to COLL-specific events.
COLL 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. COLL positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move COLL alongside the broader basket even when COLL-specific fundamentals are unchanged. Always rebuild the position from current COLL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on COLL?
- A butterfly on COLL is the butterfly strategy applied to COLL (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 COLL stock at $28.24 on the most recent close, the strikes shown on this page are snapped to the nearest listed COLL chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are COLL 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 COLL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 50.00%), 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 COLL butterfly?
- The breakeven for the COLL butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The COLL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on COLL?
- Butterflies on COLL are pinning bets - traders use them when they expect COLL 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 COLL implied volatility affect this butterfly?
- COLL ATM IV is at 50.00% with IV rank near 7.76%, 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.