DK Butterfly Strategy
DK (Delek US Holdings, Inc.), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.
Delek US Holdings, Inc. is an integrated downstream energy corporation operating within the United States. Its operations are divided into three core segments: Refining, Logistics, and Retail. The Refining segment processes crude oil and other raw materials to produce a variety of petroleum-based goods, such as gasoline, diesel, aviation fuel, and asphalt. These products are distributed through both company-owned and third-party facilities. This segment maintains and runs four independent refineries situated in Tyler, Texas; El Dorado, Arkansas; Big Spring, Texas; and Krotz Springs, Louisiana, alongside three biodiesel production plants located in Crossett, Arkansas; Cleburne, Texas; and New Albany. The Logistics division focuses on the collection, transportation, and storage of crude oil, intermediate products, and refined petroleum.
DK (Delek US Holdings, Inc.) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $4.15B, a trailing P/E of 3.55, a beta of 0.56 versus the broader market, a 52-week range of 25.85-82.27, average daily share volume of 1.8M, a public-listing history dating back to 2006, approximately 2K full-time employees. These structural characteristics shape how DK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.56 indicates DK 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 3.55 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. DK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on DK?
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.
DK snapshot
As of November 13, 2026, spot at $68.47, ATM IV 54.20%, IV rank 20.18%, expected move 15.54%. The butterfly on DK below is built from the November 13, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on DK specifically: DK IV at 54.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a DK butterfly, with a market-implied 1-standard-deviation move of approximately 15.54% (roughly $10.64 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DK expiries trade a higher absolute premium for lower per-day decay. Position sizing on DK should anchor to the underlying notional of $68.47 per share and to the trader's directional view on DK stock.
DK butterfly setup
The DK butterfly below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With DK at $68.47 on that close, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DK chain at a 35-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 DK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $65.00 | $6.15 |
| Sell 2 | Call | $67.50 | $5.00 |
| Buy 1 | Call | $72.50 | $3.15 |
DK butterfly risk and reward
- Net Premium / Debit
- +$70.00
- Max Profit (per contract)
- $314.29
- Max Loss (per contract)
- -$180.00
- Breakeven(s)
- $70.70
- Risk / Reward Ratio
- 1.746
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.
DK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DK. 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% | +$70.00 |
| $15.15 | -77.9% | +$70.00 |
| $30.29 | -55.8% | +$70.00 |
| $45.42 | -33.7% | +$70.00 |
| $60.56 | -11.5% | +$70.00 |
| $75.70 | +10.6% | -$180.00 |
| $90.84 | +32.7% | -$180.00 |
| $105.98 | +54.8% | -$180.00 |
| $121.11 | +76.9% | -$180.00 |
| $136.25 | +99.0% | -$180.00 |
When traders use butterfly on DK
Butterflies on DK are pinning bets - traders use them when they expect DK 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.
DK thesis for this butterfly
The market-implied 1-standard-deviation range for DK extends from approximately $57.83 on the downside to $79.11 on the upside. A DK long call butterfly is a pinning play: it pays maximum at the middle strike if DK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DK IV rank near 20.18% 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 DK at 54.20%. As a Energy name, DK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DK-specific events.
DK 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. DK positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DK alongside the broader basket even when DK-specific fundamentals are unchanged. Always rebuild the position from current DK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DK?
- A butterfly on DK is the butterfly strategy applied to DK (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 DK stock at $68.47 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed DK chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are DK 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 DK butterfly priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 54.20%), the computed maximum profit is $314.29 per contract and the computed maximum loss is -$180.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DK butterfly?
- The breakeven for the DK butterfly priced on this page is roughly $70.70 at expiration, derived from the November 13, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The DK market-implied 1-standard-deviation expected move in the same options snapshot is approximately 15.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DK?
- Butterflies on DK are pinning bets - traders use them when they expect DK 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 DK implied volatility affect this butterfly?
- DK ATM IV is at 54.20% with IV rank near 20.18%, 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.