DH Butterfly Strategy
DH (Definitive Healthcare Corp.), in the Healthcare sector, (Medical - Healthcare Information Services industry), listed on NASDAQ.
Definitive Healthcare Corp., together with its subsidiaries, provides healthcare commercial intelligence in the United States. Its solutions provide information on healthcare providers and their activities to help its customers in the area ranging from product development to go-to-market planning, and sales and marketing execution. The company's platform offers 16 intelligence modules that cover functional areas, such as sales, marketing, clinical research and product development, strategy, talent acquisition, and physician network management. It serves biopharmaceutical and medical device companies, healthcare information technology companies, and healthcare providers; and other diversified companies comprising staffing and commercial real estate companies, financial institutions, and other organizations in the healthcare ecosystem. Definitive Healthcare Corp. was founded in 2011 and is headquartered in Framingham, Massachusetts.
DH (Definitive Healthcare Corp.) trades in the Healthcare sector, specifically Medical - Healthcare Information Services, with a market capitalization of approximately $93.5M, a beta of 1.34 versus the broader market, a 52-week range of 0.881-4.7, average daily share volume of 347K, a public-listing history dating back to 2021, approximately 782 full-time employees. These structural characteristics shape how DH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.34 indicates DH has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on DH?
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 DH snapshot
As of May 15, 2026, spot at $0.83, ATM IV 27.40%, IV rank 2.24%, expected move 7.86%. The butterfly on DH 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 DH specifically: DH IV at 27.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a DH butterfly, with a market-implied 1-standard-deviation move of approximately 7.86% (roughly $0.07 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 DH expiries trade a higher absolute premium for lower per-day decay. Position sizing on DH should anchor to the underlying notional of $0.83 per share and to the trader's directional view on DH stock.
DH butterfly setup
The DH 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 DH near $0.83, the first option leg uses a $0.79 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DH 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 DH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.79 | N/A |
| Sell 2 | Call | $0.83 | N/A |
| Buy 1 | Call | $0.87 | N/A |
DH 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.
DH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DH. 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 DH
Butterflies on DH are pinning bets - traders use them when they expect DH 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.
DH thesis for this butterfly
The market-implied 1-standard-deviation range for DH extends from approximately $0.76 on the downside to $0.90 on the upside. A DH long call butterfly is a pinning play: it pays maximum at the middle strike if DH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DH IV rank near 2.24% 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 DH at 27.40%. As a Healthcare name, DH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DH-specific events.
DH 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. DH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DH alongside the broader basket even when DH-specific fundamentals are unchanged. Always rebuild the position from current DH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DH?
- A butterfly on DH is the butterfly strategy applied to DH (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 DH stock trading near $0.83, the strikes shown on this page are snapped to the nearest listed DH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DH 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 DH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.40%), 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 DH butterfly?
- The breakeven for the DH 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 DH market-implied 1-standard-deviation expected move is approximately 7.86%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DH?
- Butterflies on DH are pinning bets - traders use them when they expect DH 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 DH implied volatility affect this butterfly?
- DH ATM IV is at 27.40% with IV rank near 2.24%, 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.