DLO Butterfly Strategy
DLO (DLocal Limited), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
DLocal Limited operates a payments platform in the United States, Europe, China, and internationally. Its payments platform enables merchants to get paid and to make payments online. The company serves commerce, streaming, ride-hailing, financial services, advertising, software as a service, travel, e-learning, on-demand delivery, gaming, and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.
DLO (DLocal Limited) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $3.54B, a trailing P/E of 18.24, a beta of 1.02 versus the broader market, a 52-week range of 9.75-16.78, average daily share volume of 1.8M, a public-listing history dating back to 2021, approximately 1K full-time employees. These structural characteristics shape how DLO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.02 places DLO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DLO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on DLO?
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 DLO snapshot
As of May 15, 2026, spot at $11.27, ATM IV 52.50%, IV rank 12.87%, expected move 15.05%. The butterfly on DLO 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 DLO specifically: DLO IV at 52.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a DLO butterfly, with a market-implied 1-standard-deviation move of approximately 15.05% (roughly $1.70 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 DLO expiries trade a higher absolute premium for lower per-day decay. Position sizing on DLO should anchor to the underlying notional of $11.27 per share and to the trader's directional view on DLO stock.
DLO butterfly setup
The DLO 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 DLO near $11.27, the first option leg uses a $10.71 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DLO 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 DLO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $10.71 | N/A |
| Sell 2 | Call | $11.27 | N/A |
| Buy 1 | Call | $11.83 | N/A |
DLO 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.
DLO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DLO. 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 DLO
Butterflies on DLO are pinning bets - traders use them when they expect DLO 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.
DLO thesis for this butterfly
The market-implied 1-standard-deviation range for DLO extends from approximately $9.57 on the downside to $12.97 on the upside. A DLO long call butterfly is a pinning play: it pays maximum at the middle strike if DLO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DLO IV rank near 12.87% 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 DLO at 52.50%. As a Technology name, DLO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DLO-specific events.
DLO 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. DLO positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DLO alongside the broader basket even when DLO-specific fundamentals are unchanged. Always rebuild the position from current DLO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DLO?
- A butterfly on DLO is the butterfly strategy applied to DLO (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 DLO stock trading near $11.27, the strikes shown on this page are snapped to the nearest listed DLO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DLO 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 DLO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 52.50%), 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 DLO butterfly?
- The breakeven for the DLO 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 DLO market-implied 1-standard-deviation expected move is approximately 15.05%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DLO?
- Butterflies on DLO are pinning bets - traders use them when they expect DLO 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 DLO implied volatility affect this butterfly?
- DLO ATM IV is at 52.50% with IV rank near 12.87%, 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.