FHN Butterfly Strategy
FHN (First Horizon Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through three segments: Regional Banking, Specialty Banking, and Corporate. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also underwrites bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; sells loans and derivatives; and offers advisory services. In addition, it offers various services, such as mortgage banking; title insurance and loan-closing; brokerage; correspondent banking; nationwide check clearing and remittance processing; trust, fiduciary, and agency; equipment finance; and investment and financial advisory services. Further, the company sells mutual fund and retail insurance products; and credit cards.
FHN (First Horizon Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $11.12B, a trailing P/E of 10.95, a beta of 0.63 versus the broader market, a 52-week range of 19.04-26.56, average daily share volume of 5.2M, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how FHN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.63 indicates FHN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 10.95 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. FHN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FHN?
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 FHN snapshot
As of May 15, 2026, spot at $23.59, ATM IV 28.00%, IV rank 17.19%, expected move 8.03%. The butterfly on FHN 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 98-day expiry.
Why this butterfly structure on FHN specifically: FHN IV at 28.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a FHN butterfly, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $1.89 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FHN expiries trade a higher absolute premium for lower per-day decay. Position sizing on FHN should anchor to the underlying notional of $23.59 per share and to the trader's directional view on FHN stock.
FHN butterfly setup
The FHN 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 FHN near $23.59, the first option leg uses a $22.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FHN chain at a 98-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 FHN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $22.00 | $2.48 |
| Sell 2 | Call | $24.00 | $1.30 |
| Buy 1 | Call | $25.00 | $0.88 |
FHN butterfly risk and reward
- Net Premium / Debit
- -$75.00
- Max Profit (per contract)
- $120.06
- Max Loss (per contract)
- -$75.00
- Breakeven(s)
- $22.75
- Risk / Reward Ratio
- 1.601
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.
FHN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FHN. 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% | -$75.00 |
| $5.22 | -77.9% | -$75.00 |
| $10.44 | -55.7% | -$75.00 |
| $15.65 | -33.6% | -$75.00 |
| $20.87 | -11.5% | -$75.00 |
| $26.08 | +10.6% | +$25.00 |
| $31.30 | +32.7% | +$25.00 |
| $36.51 | +54.8% | +$25.00 |
| $41.73 | +76.9% | +$25.00 |
| $46.94 | +99.0% | +$25.00 |
When traders use butterfly on FHN
Butterflies on FHN are pinning bets - traders use them when they expect FHN 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.
FHN thesis for this butterfly
The market-implied 1-standard-deviation range for FHN extends from approximately $21.70 on the downside to $25.48 on the upside. A FHN long call butterfly is a pinning play: it pays maximum at the middle strike if FHN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FHN IV rank near 17.19% 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 FHN at 28.00%. As a Financial Services name, FHN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FHN-specific events.
FHN 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. FHN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FHN alongside the broader basket even when FHN-specific fundamentals are unchanged. Always rebuild the position from current FHN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FHN?
- A butterfly on FHN is the butterfly strategy applied to FHN (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 FHN stock trading near $23.59, the strikes shown on this page are snapped to the nearest listed FHN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FHN 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 FHN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), the computed maximum profit is $120.06 per contract and the computed maximum loss is -$75.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FHN butterfly?
- The breakeven for the FHN butterfly priced on this page is roughly $22.75 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 FHN market-implied 1-standard-deviation expected move is approximately 8.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FHN?
- Butterflies on FHN are pinning bets - traders use them when they expect FHN 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 FHN implied volatility affect this butterfly?
- FHN ATM IV is at 28.00% with IV rank near 17.19%, 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.