FICO Butterfly Strategy
FICO (Fair Isaac Corporation), in the Technology sector, (Software - Application industry), listed on NYSE.
Fair Isaac Corporation develops analytic, software, and data management products and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Scores and Software. The Software segment offers pre-configured decision management solution designed for various business problems or processes, such as marketing, account origination, customer management, customer engagement, fraud detection, financial crimes compliance, collection, and marketing, as well as associated professional services. This segment also provides FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to analytics to be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. Fair Isaac Corporation markets its products and services primarily through its direct sales organization and indirect channels, as well as online.
FICO (Fair Isaac Corporation) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $24.69B, a trailing P/E of 33.12, a beta of 1.23 versus the broader market, a 52-week range of 870.01-2217.6, average daily share volume of 372K, a public-listing history dating back to 1987, approximately 4K full-time employees. These structural characteristics shape how FICO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.23 places FICO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on FICO?
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 FICO snapshot
As of May 15, 2026, spot at $1,098.10, ATM IV 58.00%, IV rank 57.87%, expected move 16.63%. The butterfly on FICO 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 FICO specifically: FICO IV at 58.00% 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 16.63% (roughly $182.59 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 FICO expiries trade a higher absolute premium for lower per-day decay. Position sizing on FICO should anchor to the underlying notional of $1,098.10 per share and to the trader's directional view on FICO stock.
FICO butterfly setup
The FICO 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 FICO near $1,098.10, the first option leg uses a $1,040.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FICO 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 FICO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1,040.00 | $108.55 |
| Sell 2 | Call | $1,100.00 | $74.85 |
| Buy 1 | Call | $1,150.00 | $54.45 |
FICO butterfly risk and reward
- Net Premium / Debit
- -$1,330.00
- Max Profit (per contract)
- $4,307.69
- Max Loss (per contract)
- -$1,330.00
- Breakeven(s)
- $1,053.30, $1,146.70
- Risk / Reward Ratio
- 3.239
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.
FICO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FICO. 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% | -$1,330.00 |
| $242.80 | -77.9% | -$1,330.00 |
| $485.60 | -55.8% | -$1,330.00 |
| $728.39 | -33.7% | -$1,330.00 |
| $971.19 | -11.6% | -$1,330.00 |
| $1,213.98 | +10.6% | -$330.00 |
| $1,456.78 | +32.7% | -$330.00 |
| $1,699.57 | +54.8% | -$330.00 |
| $1,942.37 | +76.9% | -$330.00 |
| $2,185.16 | +99.0% | -$330.00 |
When traders use butterfly on FICO
Butterflies on FICO are pinning bets - traders use them when they expect FICO 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.
FICO thesis for this butterfly
The market-implied 1-standard-deviation range for FICO extends from approximately $915.51 on the downside to $1,280.69 on the upside. A FICO long call butterfly is a pinning play: it pays maximum at the middle strike if FICO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FICO IV rank near 57.87% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on FICO should anchor more to the directional view and the expected-move geometry. As a Technology name, FICO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FICO-specific events.
FICO 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. FICO positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FICO alongside the broader basket even when FICO-specific fundamentals are unchanged. Always rebuild the position from current FICO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FICO?
- A butterfly on FICO is the butterfly strategy applied to FICO (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 FICO stock trading near $1,098.10, the strikes shown on this page are snapped to the nearest listed FICO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FICO 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 FICO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 58.00%), the computed maximum profit is $4,307.69 per contract and the computed maximum loss is -$1,330.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FICO butterfly?
- The breakeven for the FICO butterfly priced on this page is roughly $1,053.30 and $1,146.70 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 FICO market-implied 1-standard-deviation expected move is approximately 16.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FICO?
- Butterflies on FICO are pinning bets - traders use them when they expect FICO 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 FICO implied volatility affect this butterfly?
- FICO ATM IV is at 58.00% with IV rank near 57.87%, 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.