DSGN Butterfly Strategy
DSGN (Design Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Design Therapeutics, Inc. is a biopharmaceutical company in the preclinical phase that focuses on creating treatments for genetic conditions stemming from nucleotide repeat expansions. Its current pipeline targets Friedreich's Ataxia (FA), a severe, progressive, monogenic, and autosomal recessive disease. FA primarily impairs mitochondrial function across various organ systems, resulting in neurological, cardiac, and metabolic complications. Another significant area of development is Myotonic Dystrophy Type-1 (DM1). This is a progressive, dominantly inherited monogenic neuromuscular illness that impacts skeletal muscle, the heart, brain, and other bodily systems. Beyond these, the company is advancing its GeneTAC product candidate platform to address an array of other monogenic conditions caused by nucleotide repeat expansions.
DSGN (Design Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $670.5M, a beta of 1.74 versus the broader market, a 52-week range of 6.81-17.25, average daily share volume of 557K, a public-listing history dating back to 2021, approximately 60 full-time employees. These structural characteristics shape how DSGN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.74 indicates DSGN 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 DSGN?
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.
DSGN snapshot
As of November 13, 2026, spot at $10.45. The butterfly on DSGN 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 DSGN specifically: IV rank is unavailable in the current snapshot, so regime-based timing for DSGN is inferred from ATM IV alone. The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DSGN expiries trade a higher absolute premium for lower per-day decay. Position sizing on DSGN should anchor to the underlying notional of $10.45 per share and to the trader's directional view on DSGN stock.
DSGN butterfly setup
The DSGN 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 DSGN at $10.45 on that close, the first option leg uses a $10.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DSGN 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 DSGN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $10.00 | $2.10 |
| Sell 2 | Call | $10.00 | $2.10 |
| Buy 1 | Call | $11.00 | $1.69 |
DSGN butterfly risk and reward
- Net Premium / Debit
- +$41.00
- Max Profit (per contract)
- $41.00
- Max Loss (per contract)
- -$59.00
- Breakeven(s)
- $10.41
- Risk / Reward Ratio
- 0.695
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.
DSGN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DSGN. 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 | -99.9% | +$41.00 |
| $2.32 | -77.8% | +$41.00 |
| $4.63 | -55.7% | +$41.00 |
| $6.94 | -33.6% | +$41.00 |
| $9.25 | -11.5% | +$41.00 |
| $11.56 | +10.6% | -$59.00 |
| $13.87 | +32.7% | -$59.00 |
| $16.18 | +54.8% | -$59.00 |
| $18.49 | +76.9% | -$59.00 |
| $20.80 | +99.0% | -$59.00 |
When traders use butterfly on DSGN
Butterflies on DSGN are pinning bets - traders use them when they expect DSGN 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.
DSGN thesis for this butterfly
A DSGN long call butterfly is a pinning play: it pays maximum at the middle strike if DSGN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Healthcare name, DSGN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DSGN-specific events.
DSGN 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. DSGN positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DSGN alongside the broader basket even when DSGN-specific fundamentals are unchanged. Always rebuild the position from current DSGN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DSGN?
- A butterfly on DSGN is the butterfly strategy applied to DSGN (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 DSGN stock at $10.45 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed DSGN chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are DSGN 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 DSGN butterfly priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV the current ATM IV), the computed maximum profit is $41.00 per contract and the computed maximum loss is -$59.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DSGN butterfly?
- The breakeven for the DSGN butterfly priced on this page is roughly $10.41 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.
- When should you consider a butterfly on DSGN?
- Butterflies on DSGN are pinning bets - traders use them when they expect DSGN 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 DSGN implied volatility affect this butterfly?
- Current DSGN ATM IV is the current ATM IV; IV rank context is unavailable in the current snapshot.