FOSL Butterfly Strategy
FOSL (Fossil Group, Inc.), in the Consumer Cyclical sector, (Luxury Goods industry), listed on NASDAQ.
Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company's products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as purchases and resells branded products in non-FOSSIL branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, PUMA, TORY BURCH, Skechers, and BMW. The company sells its products through company-owned retail and outlet stores, department stores, specialty retail stores, specialty watch and jewelry stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines and cruise ships. As of January 2, 2022, it operated 370 stores worldwide.
FOSL (Fossil Group, Inc.) trades in the Consumer Cyclical sector, specifically Luxury Goods, with a market capitalization of approximately $242.2M, a beta of 1.65 versus the broader market, a 52-week range of 1.24-5.75, average daily share volume of 775K, a public-listing history dating back to 1993, approximately 5K full-time employees. These structural characteristics shape how FOSL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.65 indicates FOSL has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on FOSL?
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 FOSL snapshot
As of May 15, 2026, spot at $4.05, ATM IV 74.00%, IV rank 8.40%, expected move 21.22%. The butterfly on FOSL 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 FOSL specifically: FOSL IV at 74.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a FOSL butterfly, with a market-implied 1-standard-deviation move of approximately 21.22% (roughly $0.86 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 FOSL expiries trade a higher absolute premium for lower per-day decay. Position sizing on FOSL should anchor to the underlying notional of $4.05 per share and to the trader's directional view on FOSL stock.
FOSL butterfly setup
The FOSL 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 FOSL 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 FOSL 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 FOSL 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 |
FOSL 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.
FOSL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FOSL. 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 FOSL
Butterflies on FOSL are pinning bets - traders use them when they expect FOSL 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.
FOSL thesis for this butterfly
The market-implied 1-standard-deviation range for FOSL extends from approximately $3.19 on the downside to $4.91 on the upside. A FOSL long call butterfly is a pinning play: it pays maximum at the middle strike if FOSL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FOSL IV rank near 8.40% 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 FOSL at 74.00%. As a Consumer Cyclical name, FOSL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FOSL-specific events.
FOSL 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. FOSL positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FOSL alongside the broader basket even when FOSL-specific fundamentals are unchanged. Always rebuild the position from current FOSL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FOSL?
- A butterfly on FOSL is the butterfly strategy applied to FOSL (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 FOSL stock trading near $4.05, the strikes shown on this page are snapped to the nearest listed FOSL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FOSL 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 FOSL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 74.00%), 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 FOSL butterfly?
- The breakeven for the FOSL 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 FOSL market-implied 1-standard-deviation expected move is approximately 21.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FOSL?
- Butterflies on FOSL are pinning bets - traders use them when they expect FOSL 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 FOSL implied volatility affect this butterfly?
- FOSL ATM IV is at 74.00% with IV rank near 8.40%, 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.