ERAS Butterfly Strategy
ERAS (Erasca, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Erasca, Inc., a clinical-stage biopharmaceutical company, focuses on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers. The company's lead candidates include ERAS-007, an oral inhibitor of ERK1/2 for the treatment of non-small cell lung cancer, colorectal cancer, and acute myeloid leukemia; and ERAS-601, an oral SHP2 inhibitor for patients with advanced or metastatic solid tumors. It is also developing ERAS-801, a central nervous system-penetrant EGFR inhibitor for the treatment of patients with recurrent glioblastoma multiforme. The company was incorporated in 2018 and is headquartered in San Diego, California.
ERAS (Erasca, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $3.25B, a beta of 0.68 versus the broader market, a 52-week range of 1.06-24.28, average daily share volume of 6.7M, a public-listing history dating back to 2021, approximately 103 full-time employees. These structural characteristics shape how ERAS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.68 indicates ERAS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on ERAS?
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 ERAS snapshot
As of May 15, 2026, spot at $10.23, ATM IV 88.20%, IV rank 9.64%, expected move 25.29%. The butterfly on ERAS 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 ERAS specifically: ERAS IV at 88.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a ERAS butterfly, with a market-implied 1-standard-deviation move of approximately 25.29% (roughly $2.59 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 ERAS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ERAS should anchor to the underlying notional of $10.23 per share and to the trader's directional view on ERAS stock.
ERAS butterfly setup
The ERAS 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 ERAS near $10.23, the first option leg uses a $9.72 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ERAS 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 ERAS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $9.72 | N/A |
| Sell 2 | Call | $10.23 | N/A |
| Buy 1 | Call | $10.74 | N/A |
ERAS 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.
ERAS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ERAS. 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 ERAS
Butterflies on ERAS are pinning bets - traders use them when they expect ERAS 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.
ERAS thesis for this butterfly
The market-implied 1-standard-deviation range for ERAS extends from approximately $7.64 on the downside to $12.82 on the upside. A ERAS long call butterfly is a pinning play: it pays maximum at the middle strike if ERAS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ERAS IV rank near 9.64% 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 ERAS at 88.20%. As a Healthcare name, ERAS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ERAS-specific events.
ERAS 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. ERAS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ERAS alongside the broader basket even when ERAS-specific fundamentals are unchanged. Always rebuild the position from current ERAS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ERAS?
- A butterfly on ERAS is the butterfly strategy applied to ERAS (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 ERAS stock trading near $10.23, the strikes shown on this page are snapped to the nearest listed ERAS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ERAS 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 ERAS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 88.20%), 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 ERAS butterfly?
- The breakeven for the ERAS 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 ERAS market-implied 1-standard-deviation expected move is approximately 25.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ERAS?
- Butterflies on ERAS are pinning bets - traders use them when they expect ERAS 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 ERAS implied volatility affect this butterfly?
- ERAS ATM IV is at 88.20% with IV rank near 9.64%, 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.