GEO Butterfly Strategy
GEO (The GEO Group, Inc.), in the Industrials sector, (Security & Protection Services industry), listed on NYSE.
The GEO Group, Inc. engages in the ownership, leasing, and management of secure facilities, reentry facilities, and processing centers in the United States, Australia, and South Africa. It operates through four segments: U.S. Secure Services, Electronic Monitoring and Supervision Services, Reentry Services, and International Services. The company provides counseling, education, and treatment for alcohol and drug abuse problems at various facilities; and compliance technologies for monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants. It also offers secure facility management services, including security, administrative, rehabilitation, education, and food services at secure services facilities; reentry services comprising supervision of individuals in community-based programs and reentry centers, and provision of temporary housing, programming, employment assistance, and other services; and supervision and reporting services that improves the participation of non-detained aliens in the immigration court system. In addition, the company provides secure transportation services; and rehabilitation services, such as evidence-based, including cognitive behavioral treatment and post-release services, as well as academic and vocational classes in life skills and treatment programs under the GEO Continuum of Care platform; and develops new facilities based on contract, as well as designs, constructs, and finances the facilities.
GEO (The GEO Group, Inc.) trades in the Industrials sector, specifically Security & Protection Services, with a market capitalization of approximately $3.03B, a trailing P/E of 11.00, a beta of 0.82 versus the broader market, a 52-week range of 12.51-27.9, average daily share volume of 2.4M, a public-listing history dating back to 1994, approximately 17K full-time employees. These structural characteristics shape how GEO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.82 places GEO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.00 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on GEO?
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 GEO snapshot
As of May 15, 2026, spot at $23.15, ATM IV 49.90%, IV rank 30.41%, expected move 14.31%. The butterfly on GEO 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 GEO specifically: GEO IV at 49.90% 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 14.31% (roughly $3.31 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 GEO expiries trade a higher absolute premium for lower per-day decay. Position sizing on GEO should anchor to the underlying notional of $23.15 per share and to the trader's directional view on GEO stock.
GEO butterfly setup
The GEO 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 GEO near $23.15, the first option leg uses a $22.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GEO 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 GEO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $22.00 | $2.20 |
| Sell 2 | Call | $23.00 | $1.55 |
| Buy 1 | Call | $24.00 | $1.05 |
GEO butterfly risk and reward
- Net Premium / Debit
- -$15.00
- Max Profit (per contract)
- $81.13
- Max Loss (per contract)
- -$15.00
- Breakeven(s)
- $22.15, $23.85
- Risk / Reward Ratio
- 5.409
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.
GEO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GEO. 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% | -$15.00 |
| $5.13 | -77.9% | -$15.00 |
| $10.24 | -55.7% | -$15.00 |
| $15.36 | -33.6% | -$15.00 |
| $20.48 | -11.5% | -$15.00 |
| $25.60 | +10.6% | -$15.00 |
| $30.71 | +32.7% | -$15.00 |
| $35.83 | +54.8% | -$15.00 |
| $40.95 | +76.9% | -$15.00 |
| $46.07 | +99.0% | -$15.00 |
When traders use butterfly on GEO
Butterflies on GEO are pinning bets - traders use them when they expect GEO 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.
GEO thesis for this butterfly
The market-implied 1-standard-deviation range for GEO extends from approximately $19.84 on the downside to $26.46 on the upside. A GEO long call butterfly is a pinning play: it pays maximum at the middle strike if GEO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GEO IV rank near 30.41% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on GEO should anchor more to the directional view and the expected-move geometry. As a Industrials name, GEO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GEO-specific events.
GEO 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. GEO positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GEO alongside the broader basket even when GEO-specific fundamentals are unchanged. Always rebuild the position from current GEO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GEO?
- A butterfly on GEO is the butterfly strategy applied to GEO (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 GEO stock trading near $23.15, the strikes shown on this page are snapped to the nearest listed GEO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are GEO 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 GEO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 49.90%), the computed maximum profit is $81.13 per contract and the computed maximum loss is -$15.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GEO butterfly?
- The breakeven for the GEO butterfly priced on this page is roughly $22.15 and $23.85 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 GEO market-implied 1-standard-deviation expected move is approximately 14.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GEO?
- Butterflies on GEO are pinning bets - traders use them when they expect GEO 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 GEO implied volatility affect this butterfly?
- GEO ATM IV is at 49.90% with IV rank near 30.41%, 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.