FBP Butterfly Strategy
FBP (First BanCorp.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
First BanCorp., operating as the holding company for FirstBank Puerto Rico, delivers a broad spectrum of financial services to retail, commercial, and institutional clients. The company's operations are structured into six key segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers business financing, including commercial real estate, construction, and floor plan loans, alongside treasury and cash management services. Mortgage Banking handles the origination, sale, and servicing of residential mortgage loans, in addition to acquiring and selling mortgages in secondary markets. The Consumer (Retail) Banking segment provides personal financial products such as auto, boat, credit card, and personal loans, lines of credit, and various deposit accounts like checking, savings, IRAs, and retail CDs, complemented by finance leasing and insurance agency services. The Treasury and Investments segment is responsible for funding and liquidity management.
FBP (First BanCorp.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $4.08B, a trailing P/E of 11.48, a beta of 0.83 versus the broader market, a 52-week range of 19.16-26.8, average daily share volume of 1.5M, a public-listing history dating back to 1987, approximately 3K full-time employees. These structural characteristics shape how FBP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places FBP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.48 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. FBP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FBP?
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 FBP snapshot
As of June 30, 2026, spot at $25.98, ATM IV 93.40%, IV rank 29.56%, expected move 26.78%. The butterfly on FBP 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 17-day expiry.
Why this butterfly structure on FBP specifically: FBP IV at 93.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a FBP butterfly, with a market-implied 1-standard-deviation move of approximately 26.78% (roughly $6.96 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FBP expiries trade a higher absolute premium for lower per-day decay. Position sizing on FBP should anchor to the underlying notional of $25.98 per share and to the trader's directional view on FBP stock.
FBP butterfly setup
The FBP 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 FBP near $25.98, the first option leg uses a $24.68 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FBP chain at a 17-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 FBP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $24.68 | N/A |
| Sell 2 | Call | $25.98 | N/A |
| Buy 1 | Call | $27.28 | N/A |
FBP 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.
FBP butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FBP. 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 FBP
Butterflies on FBP are pinning bets - traders use them when they expect FBP 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.
FBP thesis for this butterfly
The market-implied 1-standard-deviation range for FBP extends from approximately $19.02 on the downside to $32.94 on the upside. A FBP long call butterfly is a pinning play: it pays maximum at the middle strike if FBP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FBP IV rank near 29.56% 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 FBP at 93.40%. As a Financial Services name, FBP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FBP-specific events.
FBP 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. FBP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FBP alongside the broader basket even when FBP-specific fundamentals are unchanged. Always rebuild the position from current FBP chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FBP?
- A butterfly on FBP is the butterfly strategy applied to FBP (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 FBP stock trading near $25.98, the strikes shown on this page are snapped to the nearest listed FBP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FBP 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 FBP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 93.40%), 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 FBP butterfly?
- The breakeven for the FBP 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 FBP market-implied 1-standard-deviation expected move is approximately 26.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FBP?
- Butterflies on FBP are pinning bets - traders use them when they expect FBP 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 FBP implied volatility affect this butterfly?
- FBP ATM IV is at 93.40% with IV rank near 29.56%, 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.