FF Butterfly Strategy
FF (FutureFuel Corp.), in the Basic Materials sector, (Chemicals industry), listed on NYSE.
FutureFuel Corp., through its subsidiary, FutureFuel Chemical Company, manufactures and sells diversified chemical, bio-based fuel, and bio-based specialty chemical products in the United States. The company operates through two segments, Chemicals and Biofuels. The Chemicals segment provides various custom chemicals that are used in the agricultural chemical, coatings, chemical intermediates, industrial and consumer cleaning, oil and gas, and specialty polymers industries; and performance chemicals, such as polymer modifiers, glycerin products, and various specialty chemicals and solvents. The Biofuels segment is involved in the production and sale of biodiesel and petrodiesel blends; and the buying, sale, and shipping of refined petroleum products on common carrier pipelines. This segment markets its biodiesel products directly to customers through trucks, rail, and barges. FutureFuel Corp. is headquartered in Saint Louis, Missouri.
FF (FutureFuel Corp.) trades in the Basic Materials sector, specifically Chemicals, with a market capitalization of approximately $178.1M, a beta of 1.05 versus the broader market, a 52-week range of 3.09-5.12, average daily share volume of 542K, a public-listing history dating back to 2011, approximately 537 full-time employees. These structural characteristics shape how FF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.05 places FF roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FF?
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 FF snapshot
As of May 15, 2026, spot at $4.05, ATM IV 20.60%, IV rank 0.13%, expected move 5.91%. The butterfly on FF 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 FF specifically: FF IV at 20.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a FF butterfly, with a market-implied 1-standard-deviation move of approximately 5.91% (roughly $0.24 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 FF expiries trade a higher absolute premium for lower per-day decay. Position sizing on FF should anchor to the underlying notional of $4.05 per share and to the trader's directional view on FF stock.
FF butterfly setup
The FF 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 FF near $4.05, the first option leg uses a $3.85 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FF 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 FF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.85 | N/A |
| Sell 2 | Call | $4.05 | N/A |
| Buy 1 | Call | $4.25 | N/A |
FF 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.
FF butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FF. 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 FF
Butterflies on FF are pinning bets - traders use them when they expect FF 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.
FF thesis for this butterfly
The market-implied 1-standard-deviation range for FF extends from approximately $3.81 on the downside to $4.29 on the upside. A FF long call butterfly is a pinning play: it pays maximum at the middle strike if FF settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FF IV rank near 0.13% 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 FF at 20.60%. As a Basic Materials name, FF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FF-specific events.
FF 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. FF positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FF alongside the broader basket even when FF-specific fundamentals are unchanged. Always rebuild the position from current FF chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FF?
- A butterfly on FF is the butterfly strategy applied to FF (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 FF stock trading near $4.05, the strikes shown on this page are snapped to the nearest listed FF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FF 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 FF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 20.60%), 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 FF butterfly?
- The breakeven for the FF 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 FF market-implied 1-standard-deviation expected move is approximately 5.91%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FF?
- Butterflies on FF are pinning bets - traders use them when they expect FF 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 FF implied volatility affect this butterfly?
- FF ATM IV is at 20.60% with IV rank near 0.13%, 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.