FATE Butterfly Strategy
FATE (Fate Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Fate Therapeutics, Inc. is a clinical-stage biopharmaceutical firm dedicated to creating advanced, programmed cellular immunotherapies. These innovative treatments are designed to combat cancer and various immune disorders across the globe. A significant portion of its development pipeline concentrates on NK- and T-cell immuno-oncology programs. Key candidates include FT516, which targets acute myeloid leukemia (AML), B-cell lymphoma, and advanced solid tumors; FT596 for B-cell lymphoma and chronic lymphocytic leukemia; FT538, addressing AML and multiple myeloma; FT576, also focused on multiple myeloma; FT819, aimed at both hematologic malignancies and solid tumors; FT536, another program for solid tumors; and FT500, intended for advanced solid tumors. The company also actively engages in strategic collaborations to advance its research and development. It holds an agreement with Ono Pharmaceutical Co.
FATE (Fate Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $317.0M, a beta of 2.53 versus the broader market, a 52-week range of 0.93-3.23, average daily share volume of 3.4M, a public-listing history dating back to 2013, approximately 161 full-time employees. These structural characteristics shape how FATE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.53 indicates FATE has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on FATE?
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.
FATE snapshot
As of August 14, 2026, spot at $2.58, ATM IV 183.70%, IV rank 33.99%, expected move 52.67%. The butterfly on FATE below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on FATE specifically: FATE IV at 183.70% 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 52.67% (roughly $1.36 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FATE expiries trade a higher absolute premium for lower per-day decay. Position sizing on FATE should anchor to the underlying notional of $2.58 per share and to the trader's directional view on FATE stock.
FATE butterfly setup
The FATE 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 FATE at $2.58 on that close, the first option leg uses a $2.45 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FATE chain at a 35-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 FATE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $2.45 | N/A |
| Sell 2 | Call | $2.58 | N/A |
| Buy 1 | Call | $2.71 | N/A |
FATE 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.
FATE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FATE. 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 FATE
Butterflies on FATE are pinning bets - traders use them when they expect FATE 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.
FATE thesis for this butterfly
The market-implied 1-standard-deviation range for FATE extends from approximately $1.22 on the downside to $3.94 on the upside. A FATE long call butterfly is a pinning play: it pays maximum at the middle strike if FATE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FATE IV rank near 33.99% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FATE should anchor more to the directional view and the expected-move geometry. As a Healthcare name, FATE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FATE-specific events.
FATE 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. FATE positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FATE alongside the broader basket even when FATE-specific fundamentals are unchanged. Always rebuild the position from current FATE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FATE?
- A butterfly on FATE is the butterfly strategy applied to FATE (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 FATE stock at $2.58 on the most recent close, the strikes shown on this page are snapped to the nearest listed FATE chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FATE 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 FATE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 183.70%), 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 FATE butterfly?
- The breakeven for the FATE butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FATE market-implied 1-standard-deviation expected move in the same options snapshot is approximately 52.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FATE?
- Butterflies on FATE are pinning bets - traders use them when they expect FATE 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 FATE implied volatility affect this butterfly?
- FATE ATM IV is at 183.70% with IV rank near 33.99%, 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.