CRDO Butterfly Strategy
CRDO (Credo Technology Group Holding Ltd), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.
Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Mexico, Mainland China, Hong Kong, and internationally. Its products include integrated circuits, active electrical cables, and SerDes chiplets that are based on its serializer/deserializer and digital signal processor technologies. The company also offers intellectual property solutions consist of SerDes IP licensing. The company was founded in 2008 and is headquartered in San Jose, California.
CRDO (Credo Technology Group Holding Ltd) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $34.93B, a trailing P/E of 98.36, a beta of 3.18 versus the broader market, a 52-week range of 57.21-213.8, average daily share volume of 7.0M, a public-listing history dating back to 2022, approximately 500 full-time employees. These structural characteristics shape how CRDO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.18 indicates CRDO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 98.36 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on CRDO?
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 CRDO snapshot
As of May 15, 2026, spot at $173.88, ATM IV 110.05%, IV rank 78.97%, expected move 31.55%. The butterfly on CRDO 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 CRDO specifically: CRDO IV at 110.05% is rich versus its 1-year range, which makes a premium-buying CRDO butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 31.55% (roughly $54.86 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 CRDO expiries trade a higher absolute premium for lower per-day decay. Position sizing on CRDO should anchor to the underlying notional of $173.88 per share and to the trader's directional view on CRDO stock.
CRDO butterfly setup
The CRDO 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 CRDO near $173.88, the first option leg uses a $165.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CRDO 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 CRDO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $165.00 | $25.90 |
| Sell 2 | Call | $175.00 | $21.40 |
| Buy 1 | Call | $182.50 | $18.45 |
CRDO butterfly risk and reward
- Net Premium / Debit
- -$155.00
- Max Profit (per contract)
- $820.87
- Max Loss (per contract)
- -$155.00
- Breakeven(s)
- $166.55
- Risk / Reward Ratio
- 5.296
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.
CRDO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CRDO. 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% | -$155.00 |
| $38.45 | -77.9% | -$155.00 |
| $76.90 | -55.8% | -$155.00 |
| $115.34 | -33.7% | -$155.00 |
| $153.79 | -11.6% | -$155.00 |
| $192.23 | +10.6% | +$95.00 |
| $230.68 | +32.7% | +$95.00 |
| $269.12 | +54.8% | +$95.00 |
| $307.57 | +76.9% | +$95.00 |
| $346.01 | +99.0% | +$95.00 |
When traders use butterfly on CRDO
Butterflies on CRDO are pinning bets - traders use them when they expect CRDO 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.
CRDO thesis for this butterfly
The market-implied 1-standard-deviation range for CRDO extends from approximately $119.02 on the downside to $228.74 on the upside. A CRDO long call butterfly is a pinning play: it pays maximum at the middle strike if CRDO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CRDO IV rank near 78.97% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on CRDO at 110.05%. As a Technology name, CRDO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CRDO-specific events.
CRDO 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. CRDO positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CRDO alongside the broader basket even when CRDO-specific fundamentals are unchanged. Always rebuild the position from current CRDO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CRDO?
- A butterfly on CRDO is the butterfly strategy applied to CRDO (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 CRDO stock trading near $173.88, the strikes shown on this page are snapped to the nearest listed CRDO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CRDO 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 CRDO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 110.05%), the computed maximum profit is $820.87 per contract and the computed maximum loss is -$155.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CRDO butterfly?
- The breakeven for the CRDO butterfly priced on this page is roughly $166.55 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 CRDO market-implied 1-standard-deviation expected move is approximately 31.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CRDO?
- Butterflies on CRDO are pinning bets - traders use them when they expect CRDO 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 CRDO implied volatility affect this butterfly?
- CRDO ATM IV is at 110.05% with IV rank near 78.97%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.