EG Butterfly Strategy
EG (Everest Re Group, Ltd.), in the Financial Services sector, (Insurance - Reinsurance industry), listed on NYSE.
Everest Group, Ltd., through its subsidiaries, provides reinsurance and insurance products in the United States, Bermuda, and internationally. The company operates through Reinsurance Operations and Insurance Operations segments. The Reinsurance Operations segment writes property and casualty reinsurance; and specialty lines of business through reinsurance brokers, as well as directly with ceding companies in the United States, Bermuda, Ireland, Canada, Singapore, Switzerland, and the United Kingdom. The Insurance Operations segment writes property and casualty insurance directly, as well as through brokers, surplus lines brokers, and general agents in the United States, Bermuda, Canada, Europe, South America, France, Germany, Spain, Canada, Chile, the United Kingdom, Ireland, and the Netherlands. The company also provides treaty and facultative reinsurance products; admitted and non-admitted insurance products; and property and casualty reinsurance and insurance coverages, including marine, aviation, surety, errors and omissions liability, directors' and officers' liability, medical malpractice, mortgage reinsurance, other specialty lines, accident and health, and workers' compensation products. In addition, it offers commercial property and casualty insurance products through wholesale and retail brokers, surplus lines brokers, and program administrators.
EG (Everest Re Group, Ltd.) trades in the Financial Services sector, specifically Insurance - Reinsurance, with a market capitalization of approximately $13.77B, a trailing P/E of 6.89, a beta of 0.34 versus the broader market, a 52-week range of 302.44-368.29, average daily share volume of 346K, a public-listing history dating back to 1995, approximately 3K full-time employees. These structural characteristics shape how EG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.34 indicates EG 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 6.89 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. EG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on EG?
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 EG snapshot
As of May 15, 2026, spot at $351.78, ATM IV 22.00%, IV rank 27.12%, expected move 6.31%. The butterfly on EG 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 EG specifically: EG IV at 22.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a EG butterfly, with a market-implied 1-standard-deviation move of approximately 6.31% (roughly $22.19 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 EG expiries trade a higher absolute premium for lower per-day decay. Position sizing on EG should anchor to the underlying notional of $351.78 per share and to the trader's directional view on EG stock.
EG butterfly setup
The EG 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 EG near $351.78, the first option leg uses a $330.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EG 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 EG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $330.00 | $24.85 |
| Sell 2 | Call | $350.00 | $9.55 |
| Buy 1 | Call | $370.00 | $2.30 |
EG butterfly risk and reward
- Net Premium / Debit
- -$805.00
- Max Profit (per contract)
- $1,193.27
- Max Loss (per contract)
- -$805.00
- Breakeven(s)
- $338.05, $361.95
- Risk / Reward Ratio
- 1.482
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.
EG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on EG. 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% | -$805.00 |
| $77.79 | -77.9% | -$805.00 |
| $155.57 | -55.8% | -$805.00 |
| $233.35 | -33.7% | -$805.00 |
| $311.13 | -11.6% | -$805.00 |
| $388.91 | +10.6% | -$805.00 |
| $466.69 | +32.7% | -$805.00 |
| $544.47 | +54.8% | -$805.00 |
| $622.25 | +76.9% | -$805.00 |
| $700.02 | +99.0% | -$805.00 |
When traders use butterfly on EG
Butterflies on EG are pinning bets - traders use them when they expect EG 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.
EG thesis for this butterfly
The market-implied 1-standard-deviation range for EG extends from approximately $329.59 on the downside to $373.97 on the upside. A EG long call butterfly is a pinning play: it pays maximum at the middle strike if EG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current EG IV rank near 27.12% 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 EG at 22.00%. As a Financial Services name, EG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EG-specific events.
EG 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. EG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EG alongside the broader basket even when EG-specific fundamentals are unchanged. Always rebuild the position from current EG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on EG?
- A butterfly on EG is the butterfly strategy applied to EG (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 EG stock trading near $351.78, the strikes shown on this page are snapped to the nearest listed EG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EG 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 EG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.00%), the computed maximum profit is $1,193.27 per contract and the computed maximum loss is -$805.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EG butterfly?
- The breakeven for the EG butterfly priced on this page is roughly $338.05 and $361.95 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 EG market-implied 1-standard-deviation expected move is approximately 6.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on EG?
- Butterflies on EG are pinning bets - traders use them when they expect EG 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 EG implied volatility affect this butterfly?
- EG ATM IV is at 22.00% with IV rank near 27.12%, 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.