DVA Butterfly Strategy
DVA (DaVita Inc.), in the Healthcare sector, (Medical - Care Facilities industry), listed on NYSE.
DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure. The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company provides disease management services to 16,000 patients in risk-based integrated care arrangements and 7,000 patients in other integrated care arrangements; vascular access services; clinical research programs; physician services; and comprehensive kidney care services. As of December 31, 2021, it provided dialysis and administrative services in the United States through a network of 2,815 outpatient dialysis centers serving approximately 203,100 patients; and operated 339 outpatient dialysis centers located in 10 countries outside of the United States serving approximately 39,900 patients. Further, the company provides acute inpatient dialysis services in approximately 850 hospitals and related laboratory services in the United States.
DVA (DaVita Inc.) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $12.72B, a trailing P/E of 17.08, a beta of 0.84 versus the broader market, a 52-week range of 101-202.69, average daily share volume of 867K, a public-listing history dating back to 1995, approximately 76K full-time employees. These structural characteristics shape how DVA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.84 places DVA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on DVA?
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 DVA snapshot
As of May 15, 2026, spot at $199.45, ATM IV 30.10%, IV rank 10.93%, expected move 8.63%. The butterfly on DVA 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 DVA specifically: DVA IV at 30.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a DVA butterfly, with a market-implied 1-standard-deviation move of approximately 8.63% (roughly $17.21 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 DVA expiries trade a higher absolute premium for lower per-day decay. Position sizing on DVA should anchor to the underlying notional of $199.45 per share and to the trader's directional view on DVA stock.
DVA butterfly setup
The DVA 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 DVA near $199.45, the first option leg uses a $190.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DVA 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 DVA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $190.00 | $12.95 |
| Sell 2 | Call | $200.00 | $7.00 |
| Buy 1 | Call | $210.00 | $3.18 |
DVA butterfly risk and reward
- Net Premium / Debit
- -$212.50
- Max Profit (per contract)
- $741.78
- Max Loss (per contract)
- -$212.50
- Breakeven(s)
- $192.13, $207.88
- Risk / Reward Ratio
- 3.491
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.
DVA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on DVA. 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% | -$212.50 |
| $44.11 | -77.9% | -$212.50 |
| $88.21 | -55.8% | -$212.50 |
| $132.31 | -33.7% | -$212.50 |
| $176.40 | -11.6% | -$212.50 |
| $220.50 | +10.6% | -$212.50 |
| $264.60 | +32.7% | -$212.50 |
| $308.70 | +54.8% | -$212.50 |
| $352.80 | +76.9% | -$212.50 |
| $396.90 | +99.0% | -$212.50 |
When traders use butterfly on DVA
Butterflies on DVA are pinning bets - traders use them when they expect DVA 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.
DVA thesis for this butterfly
The market-implied 1-standard-deviation range for DVA extends from approximately $182.24 on the downside to $216.66 on the upside. A DVA long call butterfly is a pinning play: it pays maximum at the middle strike if DVA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DVA IV rank near 10.93% 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 DVA at 30.10%. As a Healthcare name, DVA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DVA-specific events.
DVA 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. DVA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DVA alongside the broader basket even when DVA-specific fundamentals are unchanged. Always rebuild the position from current DVA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on DVA?
- A butterfly on DVA is the butterfly strategy applied to DVA (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 DVA stock trading near $199.45, the strikes shown on this page are snapped to the nearest listed DVA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DVA 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 DVA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 30.10%), the computed maximum profit is $741.78 per contract and the computed maximum loss is -$212.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DVA butterfly?
- The breakeven for the DVA butterfly priced on this page is roughly $192.13 and $207.88 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 DVA market-implied 1-standard-deviation expected move is approximately 8.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on DVA?
- Butterflies on DVA are pinning bets - traders use them when they expect DVA 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 DVA implied volatility affect this butterfly?
- DVA ATM IV is at 30.10% with IV rank near 10.93%, 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.