EHTH Butterfly Strategy
EHTH (eHealth, Inc.), in the Financial Services sector, (Insurance - Brokers industry), listed on NASDAQ.
eHealth, Inc. operates a health insurance marketplace that provides consumer engagement, education, and health insurance enrollment solutions in the United States. The company operates in two segments, Medicare; and Individual, Family and Small Business. Its ecommerce platforms organize and present health insurance information in various formats that enable individuals, families, and small businesses to research, analyze, compare, and purchase a range of health insurance plans. The company operates a marketplace that offers consumers a choice of insurance products, such as Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business, and other ancillary health insurance products from health insurance carriers. It markets health insurance plans through its websites, including eHealth.com, eHealthInsurance.com, eHealthMedicare.com, Medicare.com, PlanPrescriber.com, and GoMedigap.com, as well as through a network of marketing partners. The company also licenses its health insurance ecommerce technology that enables health insurance carriers to market and distribute health insurance plans online; and provides online sponsorship and advertising, and lead referral services. eHealth, Inc. was incorporated in 1997 and is headquartered in Santa Clara, California.
EHTH (eHealth, Inc.) trades in the Financial Services sector, specifically Insurance - Brokers, with a market capitalization of approximately $58.7M, a trailing P/E of 1.71, a beta of 1.57 versus the broader market, a 52-week range of 1.2-5.89, average daily share volume of 797K, a public-listing history dating back to 2006, approximately 2K full-time employees. These structural characteristics shape how EHTH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.57 indicates EHTH has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 1.71 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on EHTH?
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 EHTH snapshot
As of May 15, 2026, spot at $1.77, ATM IV 211.10%, IV rank 65.42%, expected move 60.52%. The butterfly on EHTH 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 EHTH specifically: EHTH IV at 211.10% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 60.52% (roughly $1.07 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 EHTH expiries trade a higher absolute premium for lower per-day decay. Position sizing on EHTH should anchor to the underlying notional of $1.77 per share and to the trader's directional view on EHTH stock.
EHTH butterfly setup
The EHTH 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 EHTH near $1.77, the first option leg uses a $1.68 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EHTH 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 EHTH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.68 | N/A |
| Sell 2 | Call | $1.77 | N/A |
| Buy 1 | Call | $1.86 | N/A |
EHTH 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.
EHTH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on EHTH. 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 EHTH
Butterflies on EHTH are pinning bets - traders use them when they expect EHTH 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.
EHTH thesis for this butterfly
The market-implied 1-standard-deviation range for EHTH extends from approximately $0.70 on the downside to $2.84 on the upside. A EHTH long call butterfly is a pinning play: it pays maximum at the middle strike if EHTH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current EHTH IV rank near 65.42% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on EHTH should anchor more to the directional view and the expected-move geometry. As a Financial Services name, EHTH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EHTH-specific events.
EHTH 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. EHTH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EHTH alongside the broader basket even when EHTH-specific fundamentals are unchanged. Always rebuild the position from current EHTH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on EHTH?
- A butterfly on EHTH is the butterfly strategy applied to EHTH (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 EHTH stock trading near $1.77, the strikes shown on this page are snapped to the nearest listed EHTH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EHTH 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 EHTH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 211.10%), 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 EHTH butterfly?
- The breakeven for the EHTH 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 EHTH market-implied 1-standard-deviation expected move is approximately 60.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on EHTH?
- Butterflies on EHTH are pinning bets - traders use them when they expect EHTH 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 EHTH implied volatility affect this butterfly?
- EHTH ATM IV is at 211.10% with IV rank near 65.42%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.