FEIM Butterfly Strategy
FEIM (Frequency Electronics, Inc.), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.
Frequency Electronics, Inc. (FEIM) is a firm dedicated to the design, development, production, and sale of highly precise timing and frequency control products and their associated components. These specialized items are primarily intended for microwave integrated circuit applications. The company's operations are divided into two main segments. The FEI-NY segment is responsible for advanced timekeeping, frequency generation, and synchronization systems, which find utility in communication satellites, ground-based cellular telecommunication stations, and other similar terrestrial installations. This segment also supplies bespoke components and systems to the United States military. Meanwhile, the FEI-Zyfer segment focuses on crafting precision navigation and timing solutions.
FEIM (Frequency Electronics, Inc.) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $772.9M, a beta of 0.66 versus the broader market, a 52-week range of 25.54-80.52, average daily share volume of 250K, a public-listing history dating back to 1980, approximately 237 full-time employees. These structural characteristics shape how FEIM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.66 indicates FEIM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FEIM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FEIM?
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.
FEIM snapshot
As of August 14, 2026, spot at $77.84, ATM IV 98.70%, IV rank 18.31%, expected move 28.30%. The butterfly on FEIM below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 7-day expiry.
Why this butterfly structure on FEIM specifically: FEIM IV at 98.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a FEIM butterfly, with a market-implied 1-standard-deviation move of approximately 28.30% (roughly $22.03 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FEIM expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEIM should anchor to the underlying notional of $77.84 per share and to the trader's directional view on FEIM stock.
FEIM butterfly setup
The FEIM butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FEIM at $77.84 on that close, the first option leg uses a $75.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEIM chain at a 7-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 FEIM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $75.00 | $5.00 |
| Sell 2 | Call | $80.00 | $2.65 |
| Buy 1 | Call | $80.00 | $2.65 |
FEIM butterfly risk and reward
- Net Premium / Debit
- -$235.00
- Max Profit (per contract)
- $265.00
- Max Loss (per contract)
- -$235.00
- Breakeven(s)
- $77.35
- Risk / Reward Ratio
- 1.128
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.
FEIM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FEIM. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$235.00 |
| $17.22 | -77.9% | -$235.00 |
| $34.43 | -55.8% | -$235.00 |
| $51.64 | -33.7% | -$235.00 |
| $68.85 | -11.6% | -$235.00 |
| $86.06 | +10.6% | +$265.00 |
| $103.27 | +32.7% | +$265.00 |
| $120.48 | +54.8% | +$265.00 |
| $137.69 | +76.9% | +$265.00 |
| $154.90 | +99.0% | +$265.00 |
When traders use butterfly on FEIM
Butterflies on FEIM are pinning bets - traders use them when they expect FEIM 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.
FEIM thesis for this butterfly
The market-implied 1-standard-deviation range for FEIM extends from approximately $55.81 on the downside to $99.87 on the upside. A FEIM long call butterfly is a pinning play: it pays maximum at the middle strike if FEIM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FEIM IV rank near 18.31% 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 FEIM at 98.70%. As a Technology name, FEIM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEIM-specific events.
FEIM 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. FEIM positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FEIM alongside the broader basket even when FEIM-specific fundamentals are unchanged. Always rebuild the position from current FEIM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FEIM?
- A butterfly on FEIM is the butterfly strategy applied to FEIM (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 FEIM stock at $77.84 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FEIM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FEIM 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 FEIM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 98.70%), the computed maximum profit is $265.00 per contract and the computed maximum loss is -$235.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FEIM butterfly?
- The breakeven for the FEIM butterfly priced on this page is roughly $77.35 at expiration, derived from the August 14, 2026 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 FEIM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 28.30%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FEIM?
- Butterflies on FEIM are pinning bets - traders use them when they expect FEIM 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 FEIM implied volatility affect this butterfly?
- FEIM ATM IV is at 98.70% with IV rank near 18.31%, 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.