CYD Butterfly Strategy
CYD (China Yuchai International Limited), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
China Yuchai International Limited, through its subsidiaries, manufactures, assembles, and sells diesel and natural gas engines for trucks, buses and passenger vehicles, marine, industrial, and agriculture applications in the People's Republic of China and internationally. It operates through two segments, Yuchai and HLGE. The company provides diesel engines comprising 4- and 6-cylinder diesel engines, high horsepower marine diesel engines, and power generator engines, as well as natural gas engines, diesel power generators, diesel engine parts, and remanufacturing services; and generator sets, as well as plug in hybrid engines, range extenders, power generation powertrains, hybrid powertrains, integrated electric drive axel powertrains, and fuel cell systems. It also engages in the hospitality and property development activities. In addition, the company designs, produces, and sells exhaust emission control systems. It distributes its engines directly to auto original equipment manufacturers, agents, and retailers, as well as provides maintenance and retrofitting services.
CYD (China Yuchai International Limited) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $1.91B, a trailing P/E of 36.97, a beta of 1.29 versus the broader market, a 52-week range of 16.21-56.55, average daily share volume of 179K, a public-listing history dating back to 1994, approximately 9K full-time employees. These structural characteristics shape how CYD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.29 places CYD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 36.97 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. CYD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on CYD?
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 CYD snapshot
As of May 15, 2026, spot at $49.71, ATM IV 67.30%, IV rank 6.54%, expected move 19.29%. The butterfly on CYD 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 CYD specifically: CYD IV at 67.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a CYD butterfly, with a market-implied 1-standard-deviation move of approximately 19.29% (roughly $9.59 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 CYD expiries trade a higher absolute premium for lower per-day decay. Position sizing on CYD should anchor to the underlying notional of $49.71 per share and to the trader's directional view on CYD stock.
CYD butterfly setup
The CYD 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 CYD near $49.71, the first option leg uses a $47.22 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CYD 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 CYD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $47.22 | N/A |
| Sell 2 | Call | $49.71 | N/A |
| Buy 1 | Call | $52.20 | N/A |
CYD 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.
CYD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CYD. 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 CYD
Butterflies on CYD are pinning bets - traders use them when they expect CYD 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.
CYD thesis for this butterfly
The market-implied 1-standard-deviation range for CYD extends from approximately $40.12 on the downside to $59.30 on the upside. A CYD long call butterfly is a pinning play: it pays maximum at the middle strike if CYD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CYD IV rank near 6.54% 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 CYD at 67.30%. As a Industrials name, CYD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CYD-specific events.
CYD 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. CYD positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CYD alongside the broader basket even when CYD-specific fundamentals are unchanged. Always rebuild the position from current CYD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CYD?
- A butterfly on CYD is the butterfly strategy applied to CYD (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 CYD stock trading near $49.71, the strikes shown on this page are snapped to the nearest listed CYD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CYD 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 CYD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 67.30%), 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 CYD butterfly?
- The breakeven for the CYD 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 CYD market-implied 1-standard-deviation expected move is approximately 19.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CYD?
- Butterflies on CYD are pinning bets - traders use them when they expect CYD 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 CYD implied volatility affect this butterfly?
- CYD ATM IV is at 67.30% with IV rank near 6.54%, 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.