DRTS Butterfly Strategy
DRTS (Alpha Tau Medical Ltd.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Alpha Tau Medical Ltd., a clinical-stage oncology therapeutics company, engages in research, development, and commercialization of diffusing alpha-emitters radiation therapy (Alpha DaRT) for the treatment of solid cancer In Israel and the United States. Its Alpha-DaRT technology used in clinical trials for skin, oral, pancreatic, and breast cancers; and preclinical studies for hepatic cell carcinoma, glioblastoma multiforme, lung cancer, and others. The company was incorporated in 2015 and is headquartered in Jerusalem, Israel.
DRTS (Alpha Tau Medical Ltd.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $848.4M, a beta of 1.12 versus the broader market, a 52-week range of 2.78-10.8, average daily share volume of 411K, a public-listing history dating back to 2021, approximately 125 full-time employees. These structural characteristics shape how DRTS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.12 places DRTS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on DRTS?
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 DRTS snapshot
As of May 15, 2026, spot at $10.34, ATM IV 97.00%, IV rank 15.90%, expected move 27.81%. The butterfly on DRTS 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 DRTS specifically: DRTS IV at 97.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a DRTS butterfly, with a market-implied 1-standard-deviation move of approximately 27.81% (roughly $2.88 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 DRTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on DRTS should anchor to the underlying notional of $10.34 per share and to the trader's directional view on DRTS stock.
DRTS butterfly setup
The DRTS 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 DRTS near $10.34, the first option leg uses a $9.82 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DRTS 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 DRTS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $9.82 | N/A |
| Sell 2 | Call | $10.34 | N/A |
| Buy 1 | Call | $10.86 | N/A |
DRTS 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.
DRTS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DRTS. 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 DRTS
Butterflies on DRTS are pinning bets - traders use them when they expect DRTS 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.
DRTS thesis for this butterfly
The market-implied 1-standard-deviation range for DRTS extends from approximately $7.46 on the downside to $13.22 on the upside. A DRTS long call butterfly is a pinning play: it pays maximum at the middle strike if DRTS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DRTS IV rank near 15.90% 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 DRTS at 97.00%. As a Healthcare name, DRTS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DRTS-specific events.
DRTS 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. DRTS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DRTS alongside the broader basket even when DRTS-specific fundamentals are unchanged. Always rebuild the position from current DRTS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DRTS?
- A butterfly on DRTS is the butterfly strategy applied to DRTS (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 DRTS stock trading near $10.34, the strikes shown on this page are snapped to the nearest listed DRTS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DRTS 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 DRTS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 97.00%), 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 DRTS butterfly?
- The breakeven for the DRTS 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 DRTS market-implied 1-standard-deviation expected move is approximately 27.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DRTS?
- Butterflies on DRTS are pinning bets - traders use them when they expect DRTS 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 DRTS implied volatility affect this butterfly?
- DRTS ATM IV is at 97.00% with IV rank near 15.90%, 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.