FA Butterfly Strategy
FA (First Advantage Corporation), in the Industrials sector, (Specialty Business Services industry), listed on NASDAQ.
First Advantage Corporation provides technology solutions for screening, verifications, safety, and compliance related to human capital worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2003 and is headquartered in Atlanta, Georgia.
FA (First Advantage Corporation) trades in the Industrials sector, specifically Specialty Business Services, with a market capitalization of approximately $2.69B, a trailing P/E of 319.37, a beta of 1.15 versus the broader market, a 52-week range of 8.82-19.01, average daily share volume of 1.3M, a public-listing history dating back to 2021, approximately 10K full-time employees. These structural characteristics shape how FA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.15 places FA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 319.37 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on FA?
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 FA snapshot
As of May 15, 2026, spot at $15.02, ATM IV 78.80%, IV rank 15.79%, expected move 22.59%. The butterfly on FA 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 FA specifically: FA IV at 78.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a FA butterfly, with a market-implied 1-standard-deviation move of approximately 22.59% (roughly $3.39 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 FA expiries trade a higher absolute premium for lower per-day decay. Position sizing on FA should anchor to the underlying notional of $15.02 per share and to the trader's directional view on FA stock.
FA butterfly setup
The FA 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 FA near $15.02, the first option leg uses a $14.27 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FA 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 FA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $14.27 | N/A |
| Sell 2 | Call | $15.02 | N/A |
| Buy 1 | Call | $15.77 | N/A |
FA 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.
FA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FA. 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 FA
Butterflies on FA are pinning bets - traders use them when they expect FA 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.
FA thesis for this butterfly
The market-implied 1-standard-deviation range for FA extends from approximately $11.63 on the downside to $18.41 on the upside. A FA long call butterfly is a pinning play: it pays maximum at the middle strike if FA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FA IV rank near 15.79% 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 FA at 78.80%. As a Industrials name, FA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FA-specific events.
FA 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. FA positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FA alongside the broader basket even when FA-specific fundamentals are unchanged. Always rebuild the position from current FA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FA?
- A butterfly on FA is the butterfly strategy applied to FA (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 FA stock trading near $15.02, the strikes shown on this page are snapped to the nearest listed FA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FA 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 FA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 78.80%), 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 FA butterfly?
- The breakeven for the FA 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 FA market-implied 1-standard-deviation expected move is approximately 22.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FA?
- Butterflies on FA are pinning bets - traders use them when they expect FA 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 FA implied volatility affect this butterfly?
- FA ATM IV is at 78.80% with IV rank near 15.79%, 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.