CRK Butterfly Strategy
CRK (Comstock Resources, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.
Comstock Resources, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of oil and natural gas primarily in North Louisiana and East Texas, the United States. As of December 31, 2021, the company had 6.1 trillion cubic feet of the natural gas equivalent of proved reserves. It also owns interests in 2,557 producing oil and natural gas wells. The company was incorporated in 1919 and is headquartered in Frisco, Texas.
CRK (Comstock Resources, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $4.27B, a trailing P/E of 6.49, a beta of 0.22 versus the broader market, a 52-week range of 14.1-31.17, average daily share volume of 2.3M, a public-listing history dating back to 1987, approximately 256 full-time employees. These structural characteristics shape how CRK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.22 indicates CRK has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 6.49 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on CRK?
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 CRK snapshot
As of May 15, 2026, spot at $14.91, ATM IV 53.60%, IV rank 18.23%, expected move 15.37%. The butterfly on CRK 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 CRK specifically: CRK IV at 53.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a CRK butterfly, with a market-implied 1-standard-deviation move of approximately 15.37% (roughly $2.29 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 CRK expiries trade a higher absolute premium for lower per-day decay. Position sizing on CRK should anchor to the underlying notional of $14.91 per share and to the trader's directional view on CRK stock.
CRK butterfly setup
The CRK 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 CRK near $14.91, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CRK 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 CRK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $14.00 | $1.50 |
| Sell 2 | Call | $15.00 | $0.95 |
| Buy 1 | Call | $16.00 | $0.58 |
CRK butterfly risk and reward
- Net Premium / Debit
- -$17.50
- Max Profit (per contract)
- $81.49
- Max Loss (per contract)
- -$17.50
- Breakeven(s)
- $14.18, $15.83
- Risk / Reward Ratio
- 4.657
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.
CRK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CRK. 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 | -99.9% | -$17.50 |
| $3.31 | -77.8% | -$17.50 |
| $6.60 | -55.7% | -$17.50 |
| $9.90 | -33.6% | -$17.50 |
| $13.19 | -11.5% | -$17.50 |
| $16.49 | +10.6% | -$17.50 |
| $19.78 | +32.7% | -$17.50 |
| $23.08 | +54.8% | -$17.50 |
| $26.37 | +76.9% | -$17.50 |
| $29.67 | +99.0% | -$17.50 |
When traders use butterfly on CRK
Butterflies on CRK are pinning bets - traders use them when they expect CRK 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.
CRK thesis for this butterfly
The market-implied 1-standard-deviation range for CRK extends from approximately $12.62 on the downside to $17.20 on the upside. A CRK long call butterfly is a pinning play: it pays maximum at the middle strike if CRK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CRK IV rank near 18.23% 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 CRK at 53.60%. As a Energy name, CRK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CRK-specific events.
CRK 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. CRK positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CRK alongside the broader basket even when CRK-specific fundamentals are unchanged. Always rebuild the position from current CRK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CRK?
- A butterfly on CRK is the butterfly strategy applied to CRK (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 CRK stock trading near $14.91, the strikes shown on this page are snapped to the nearest listed CRK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CRK 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 CRK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 53.60%), the computed maximum profit is $81.49 per contract and the computed maximum loss is -$17.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CRK butterfly?
- The breakeven for the CRK butterfly priced on this page is roughly $14.18 and $15.83 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 CRK market-implied 1-standard-deviation expected move is approximately 15.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CRK?
- Butterflies on CRK are pinning bets - traders use them when they expect CRK 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 CRK implied volatility affect this butterfly?
- CRK ATM IV is at 53.60% with IV rank near 18.23%, 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.