GE Butterfly Strategy
GE (GE Aerospace), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
Based in Evendale, Ohio, GE Aerospace is a prominent American aviation enterprise with roots tracing back to its 1878 founding by Thomas Alva Edison. The company specializes in manufacturing and supplying jet and turboprop engines, along with integrated systems, for an extensive range of aircraft, including those in commercial, military, business, and general aviation use. Its robust brand lineup features Avio Aero, Unison, GE Additive, and Dowty Propellers. GE Aerospace organizes its activities into two core segments: Commercial Engines & Services, and Defense & Propulsion Technologies. The Commercial Engines & Services division oversees the design, development, production, and maintenance of jet engines for commercial airframes, business aviation, and aeroderivative applications. Meanwhile, the Defense & Propulsion Technologies segment is dedicated to providing vital engines and critical systems for defense-related aerospace needs.
GE (GE Aerospace) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $379.05B, a trailing P/E of 42.33, a beta of 1.37 versus the broader market, a 52-week range of 263.8-388.84, average daily share volume of 5.2M, a public-listing history dating back to 1962, approximately 57K full-time employees. These structural characteristics shape how GE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.37 indicates GE has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 42.33 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. GE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GE?
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.
GE snapshot
As of August 14, 2026, spot at $368.24, ATM IV 27.80%, IV rank 14.29%, expected move 7.97%. The butterfly on GE below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this butterfly structure on GE specifically: GE IV at 27.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a GE butterfly, with a market-implied 1-standard-deviation move of approximately 7.97% (roughly $29.35 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GE expiries trade a higher absolute premium for lower per-day decay. Position sizing on GE should anchor to the underlying notional of $368.24 per share and to the trader's directional view on GE stock.
GE butterfly setup
The GE butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With GE at $368.24 on that close, the first option leg uses a $350.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GE chain at a 28-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 GE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $350.00 | $22.73 |
| Sell 2 | Call | $370.00 | $10.93 |
| Buy 1 | Call | $385.00 | $5.08 |
GE butterfly risk and reward
- Net Premium / Debit
- -$595.00
- Max Profit (per contract)
- $1,395.46
- Max Loss (per contract)
- -$595.00
- Breakeven(s)
- $355.95, $384.05
- Risk / Reward Ratio
- 2.345
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.
GE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GE. 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% | -$595.00 |
| $81.43 | -77.9% | -$595.00 |
| $162.85 | -55.8% | -$595.00 |
| $244.27 | -33.7% | -$595.00 |
| $325.69 | -11.6% | -$595.00 |
| $407.10 | +10.6% | -$95.00 |
| $488.52 | +32.7% | -$95.00 |
| $569.94 | +54.8% | -$95.00 |
| $651.36 | +76.9% | -$95.00 |
| $732.78 | +99.0% | -$95.00 |
When traders use butterfly on GE
Butterflies on GE are pinning bets - traders use them when they expect GE 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.
GE thesis for this butterfly
The market-implied 1-standard-deviation range for GE extends from approximately $338.89 on the downside to $397.59 on the upside. A GE long call butterfly is a pinning play: it pays maximum at the middle strike if GE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GE IV rank near 14.29% 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 GE at 27.80%. As a Industrials name, GE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GE-specific events.
GE 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. GE positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GE alongside the broader basket even when GE-specific fundamentals are unchanged. Always rebuild the position from current GE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GE?
- A butterfly on GE is the butterfly strategy applied to GE (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 GE stock at $368.24 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed GE chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GE 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 GE butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 27.80%), the computed maximum profit is $1,395.46 per contract and the computed maximum loss is -$595.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GE butterfly?
- The breakeven for the GE butterfly priced on this page is roughly $355.95 and $384.05 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The GE market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.97%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GE?
- Butterflies on GE are pinning bets - traders use them when they expect GE 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 GE implied volatility affect this butterfly?
- GE ATM IV is at 27.80% with IV rank near 14.29%, 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.