FTS Butterfly Strategy
FTS (Fortis Inc.), in the Utilities sector, (Regulated Electric industry), listed on NYSE.
Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 438,000 retail customers in southeastern Arizona; and 100,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,485 megawatts (MW), including 53 MW of solar capacity and 252 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,065,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 577,000 customers in southern and central Alberta; owns 4 hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 143 MW; and on Prince Edward Island with a generating capacity of 130 MW. Additionally, it provides integrated electric utility service to approximately 68,000 customers in Ontario; approximately 272,000 customers in Newfoundland and Labrador; approximately 32,000 customers on Grand Cayman, Cayman Islands; and approximately 16,000 customers on certain islands in Turks and Caicos.
FTS (Fortis Inc.) trades in the Utilities sector, specifically Regulated Electric, with a market capitalization of approximately $28.52B, a trailing P/E of 21.73, a beta of 0.43 versus the broader market, a 52-week range of 46.46-58.78, average daily share volume of 763K, a public-listing history dating back to 2010, approximately 10K full-time employees. These structural characteristics shape how FTS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.43 indicates FTS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FTS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on FTS?
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 FTS snapshot
As of May 14, 2026, spot at $56.44, ATM IV 14.10%, IV rank 3.31%, expected move 4.04%. The butterfly on FTS 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 35-day expiry.
Why this butterfly structure on FTS specifically: FTS IV at 14.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a FTS butterfly, with a market-implied 1-standard-deviation move of approximately 4.04% (roughly $2.28 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on FTS should anchor to the underlying notional of $56.44 per share and to the trader's directional view on FTS stock.
FTS butterfly setup
The FTS 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 FTS near $56.44, the first option leg uses a $53.62 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FTS chain at a 35-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 FTS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $53.62 | N/A |
| Sell 2 | Call | $56.44 | N/A |
| Buy 1 | Call | $59.26 | N/A |
FTS 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.
FTS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FTS. 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 FTS
Butterflies on FTS are pinning bets - traders use them when they expect FTS 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.
FTS thesis for this butterfly
The market-implied 1-standard-deviation range for FTS extends from approximately $54.16 on the downside to $58.72 on the upside. A FTS long call butterfly is a pinning play: it pays maximum at the middle strike if FTS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FTS IV rank near 3.31% 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 FTS at 14.10%. As a Utilities name, FTS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FTS-specific events.
FTS 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. FTS positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FTS alongside the broader basket even when FTS-specific fundamentals are unchanged. Always rebuild the position from current FTS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FTS?
- A butterfly on FTS is the butterfly strategy applied to FTS (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 FTS stock trading near $56.44, the strikes shown on this page are snapped to the nearest listed FTS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FTS 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 FTS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 14.10%), 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 FTS butterfly?
- The breakeven for the FTS 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 FTS market-implied 1-standard-deviation expected move is approximately 4.04%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FTS?
- Butterflies on FTS are pinning bets - traders use them when they expect FTS 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 FTS implied volatility affect this butterfly?
- FTS ATM IV is at 14.10% with IV rank near 3.31%, 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.