CWAN Butterfly Strategy
CWAN (Clearwater Analytics Holdings, Inc.), in the Technology sector, (Software - Application industry), listed on NYSE.
Clearwater Analytics Holdings, Inc. develops and provides a Software-as-a-Service solution for automated investment data aggregation, reconciliation, accounting, and reporting services to insurers, investment managers, corporations, institutional investors, and government entities. The company offers investment accounting and reporting, performance measurement, compliance monitoring, and risk analytics solutions. Its Clearwater Prism solution enables self-service access to data feeds from accounting, compliance, performance, and risk systems, including those offered by the company and other third-party software vendors, as well as provides flexible reporting to various users. The company was incorporated in 2021 and is headquartered in Boise, Idaho.
CWAN (Clearwater Analytics Holdings, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $7.24B, a beta of 0.60 versus the broader market, a 52-week range of 15.735-25.069, average daily share volume of 5.1M, a public-listing history dating back to 2021, approximately 2K full-time employees. These structural characteristics shape how CWAN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.60 indicates CWAN 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 CWAN?
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 CWAN snapshot
As of May 15, 2026, spot at $24.34, ATM IV 15.29%, IV rank 11.63%, expected move 4.38%. The butterfly on CWAN 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 CWAN specifically: CWAN IV at 15.29% is on the cheap side of its 1-year range, which favors premium-buying structures like a CWAN butterfly, with a market-implied 1-standard-deviation move of approximately 4.38% (roughly $1.07 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 CWAN expiries trade a higher absolute premium for lower per-day decay. Position sizing on CWAN should anchor to the underlying notional of $24.34 per share and to the trader's directional view on CWAN stock.
CWAN butterfly setup
The CWAN 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 CWAN near $24.34, the first option leg uses a $23.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CWAN 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 CWAN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $23.00 | $1.63 |
| Sell 2 | Call | $24.50 | $0.70 |
| Buy 1 | Call | $25.50 | $0.22 |
CWAN butterfly risk and reward
- Net Premium / Debit
- -$45.00
- Max Profit (per contract)
- $101.73
- Max Loss (per contract)
- -$45.00
- Breakeven(s)
- $23.45
- Risk / Reward Ratio
- 2.261
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.
CWAN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CWAN. 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% | -$45.00 |
| $5.39 | -77.9% | -$45.00 |
| $10.77 | -55.7% | -$45.00 |
| $16.15 | -33.6% | -$45.00 |
| $21.53 | -11.5% | -$45.00 |
| $26.91 | +10.6% | +$5.00 |
| $32.29 | +32.7% | +$5.00 |
| $37.67 | +54.8% | +$5.00 |
| $43.05 | +76.9% | +$5.00 |
| $48.44 | +99.0% | +$5.00 |
When traders use butterfly on CWAN
Butterflies on CWAN are pinning bets - traders use them when they expect CWAN 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.
CWAN thesis for this butterfly
The market-implied 1-standard-deviation range for CWAN extends from approximately $23.27 on the downside to $25.41 on the upside. A CWAN long call butterfly is a pinning play: it pays maximum at the middle strike if CWAN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CWAN IV rank near 11.63% 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 CWAN at 15.29%. As a Technology name, CWAN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CWAN-specific events.
CWAN 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. CWAN positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CWAN alongside the broader basket even when CWAN-specific fundamentals are unchanged. Always rebuild the position from current CWAN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CWAN?
- A butterfly on CWAN is the butterfly strategy applied to CWAN (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 CWAN stock trading near $24.34, the strikes shown on this page are snapped to the nearest listed CWAN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CWAN 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 CWAN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 15.29%), the computed maximum profit is $101.73 per contract and the computed maximum loss is -$45.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CWAN butterfly?
- The breakeven for the CWAN butterfly priced on this page is roughly $23.45 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 CWAN market-implied 1-standard-deviation expected move is approximately 4.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CWAN?
- Butterflies on CWAN are pinning bets - traders use them when they expect CWAN 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 CWAN implied volatility affect this butterfly?
- CWAN ATM IV is at 15.29% with IV rank near 11.63%, 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.