CSTE Butterfly Strategy
CSTE (Caesarstone Ltd.), in the Industrials sector, (Construction industry), listed on NASDAQ.
Caesarstone Ltd., together with its subsidiaries, develops, manufactures, and markets engineered quartz and other surfaces under the Caesarstone brand in the United States, Australia, Canada, Latin America, Asia, Israel, Europe, the Middle East, and Africa. The company's engineered quartz slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling construction end markets. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for flooring and cladding applications, as well as resells natural stones, various ancillary fabrication tools, and installation accessories; and sells sinks and materials. It sells its products directly to fabricators, sub-distributors, and resellers; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016.
CSTE (Caesarstone Ltd.) trades in the Industrials sector, specifically Construction, with a market capitalization of approximately $51.5M, a beta of 0.25 versus the broader market, a 52-week range of 0.56-2.58, average daily share volume of 1.1M, a public-listing history dating back to 2012, approximately 2K full-time employees. These structural characteristics shape how CSTE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.25 indicates CSTE has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on CSTE?
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 CSTE snapshot
As of May 15, 2026, spot at $1.72, ATM IV 191.00%, IV rank 38.44%, expected move 54.76%. The butterfly on CSTE 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 CSTE specifically: CSTE IV at 191.00% 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 54.76% (roughly $0.94 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 CSTE expiries trade a higher absolute premium for lower per-day decay. Position sizing on CSTE should anchor to the underlying notional of $1.72 per share and to the trader's directional view on CSTE stock.
CSTE butterfly setup
The CSTE 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 CSTE near $1.72, the first option leg uses a $1.63 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CSTE 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 CSTE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.63 | N/A |
| Sell 2 | Call | $1.72 | N/A |
| Buy 1 | Call | $1.81 | N/A |
CSTE 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.
CSTE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CSTE. 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 CSTE
Butterflies on CSTE are pinning bets - traders use them when they expect CSTE 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.
CSTE thesis for this butterfly
The market-implied 1-standard-deviation range for CSTE extends from approximately $0.78 on the downside to $2.66 on the upside. A CSTE long call butterfly is a pinning play: it pays maximum at the middle strike if CSTE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CSTE IV rank near 38.44% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CSTE should anchor more to the directional view and the expected-move geometry. As a Industrials name, CSTE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CSTE-specific events.
CSTE 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. CSTE positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CSTE alongside the broader basket even when CSTE-specific fundamentals are unchanged. Always rebuild the position from current CSTE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CSTE?
- A butterfly on CSTE is the butterfly strategy applied to CSTE (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 CSTE stock trading near $1.72, the strikes shown on this page are snapped to the nearest listed CSTE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CSTE 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 CSTE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 191.00%), 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 CSTE butterfly?
- The breakeven for the CSTE 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 CSTE market-implied 1-standard-deviation expected move is approximately 54.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CSTE?
- Butterflies on CSTE are pinning bets - traders use them when they expect CSTE 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 CSTE implied volatility affect this butterfly?
- CSTE ATM IV is at 191.00% with IV rank near 38.44%, 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.