FWRG Butterfly Strategy
FWRG (First Watch Restaurant Group, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.
First Watch Restaurant Group, Inc. operates and franchises restaurants under the First Watch trade name. As of March 23, 2022, it operated 341 company-owned restaurants and 94 franchised restaurants in 28 states in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is headquartered in Bradenton, Florida.
FWRG (First Watch Restaurant Group, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $664.5M, a trailing P/E of 37.56, a beta of 1.12 versus the broader market, a 52-week range of 10.09-19.53, average daily share volume of 1.8M, a public-listing history dating back to 2021, approximately 15K full-time employees. These structural characteristics shape how FWRG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.12 places FWRG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 37.56 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on FWRG?
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 FWRG snapshot
As of May 14, 2026, spot at $10.68, ATM IV 39.30%, IV rank 6.45%, expected move 11.27%. The butterfly on FWRG 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 FWRG specifically: FWRG IV at 39.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a FWRG butterfly, with a market-implied 1-standard-deviation move of approximately 11.27% (roughly $1.20 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 FWRG expiries trade a higher absolute premium for lower per-day decay. Position sizing on FWRG should anchor to the underlying notional of $10.68 per share and to the trader's directional view on FWRG stock.
FWRG butterfly setup
The FWRG 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 FWRG near $10.68, the first option leg uses a $10.15 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FWRG 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 FWRG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $10.15 | N/A |
| Sell 2 | Call | $10.68 | N/A |
| Buy 1 | Call | $11.21 | N/A |
FWRG 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.
FWRG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on FWRG. 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 FWRG
Butterflies on FWRG are pinning bets - traders use them when they expect FWRG 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.
FWRG thesis for this butterfly
The market-implied 1-standard-deviation range for FWRG extends from approximately $9.48 on the downside to $11.88 on the upside. A FWRG long call butterfly is a pinning play: it pays maximum at the middle strike if FWRG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current FWRG IV rank near 6.45% 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 FWRG at 39.30%. As a Consumer Cyclical name, FWRG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FWRG-specific events.
FWRG 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. FWRG positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FWRG alongside the broader basket even when FWRG-specific fundamentals are unchanged. Always rebuild the position from current FWRG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on FWRG?
- A butterfly on FWRG is the butterfly strategy applied to FWRG (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 FWRG stock trading near $10.68, the strikes shown on this page are snapped to the nearest listed FWRG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FWRG 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 FWRG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 39.30%), 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 FWRG butterfly?
- The breakeven for the FWRG 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 FWRG market-implied 1-standard-deviation expected move is approximately 11.27%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on FWRG?
- Butterflies on FWRG are pinning bets - traders use them when they expect FWRG 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 FWRG implied volatility affect this butterfly?
- FWRG ATM IV is at 39.30% with IV rank near 6.45%, 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.