GEVO Butterfly Strategy
GEVO (Gevo, Inc.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NASDAQ.
Gevo, Inc. operates as a renewable fuels company. It operates through four segments: Gevo, Agri-Energy, Renewable Natural Gas, and Net-Zero. The company commercializes gasoline, jet fuel, and diesel fuel to achieve zero carbon emissions, and reduce greenhouse gas emissions with sustainable alternatives. Its products also include renewable gasoline and diesel, isooctane, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein. Gevo, Inc. has a strategic alliance with Axens North America, Inc. for ethanol-to-jet technology and sustainable aviation fuel commercial project development. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006.
GEVO (Gevo, Inc.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $421.1M, a beta of 1.01 versus the broader market, a 52-week range of 1.07-2.97, average daily share volume of 4.2M, a public-listing history dating back to 2011, approximately 122 full-time employees. These structural characteristics shape how GEVO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.01 places GEVO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on GEVO?
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 GEVO snapshot
As of May 15, 2026, spot at $1.67, ATM IV 96.60%, IV rank 24.68%, expected move 27.69%. The butterfly on GEVO 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 GEVO specifically: GEVO IV at 96.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a GEVO butterfly, with a market-implied 1-standard-deviation move of approximately 27.69% (roughly $0.46 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 GEVO expiries trade a higher absolute premium for lower per-day decay. Position sizing on GEVO should anchor to the underlying notional of $1.67 per share and to the trader's directional view on GEVO stock.
GEVO butterfly setup
The GEVO 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 GEVO near $1.67, the first option leg uses a $1.59 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GEVO 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 GEVO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.59 | N/A |
| Sell 2 | Call | $1.67 | N/A |
| Buy 1 | Call | $1.75 | N/A |
GEVO 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.
GEVO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GEVO. 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 GEVO
Butterflies on GEVO are pinning bets - traders use them when they expect GEVO 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.
GEVO thesis for this butterfly
The market-implied 1-standard-deviation range for GEVO extends from approximately $1.21 on the downside to $2.13 on the upside. A GEVO long call butterfly is a pinning play: it pays maximum at the middle strike if GEVO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GEVO IV rank near 24.68% 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 GEVO at 96.60%. As a Basic Materials name, GEVO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GEVO-specific events.
GEVO 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. GEVO positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GEVO alongside the broader basket even when GEVO-specific fundamentals are unchanged. Always rebuild the position from current GEVO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GEVO?
- A butterfly on GEVO is the butterfly strategy applied to GEVO (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 GEVO stock trading near $1.67, the strikes shown on this page are snapped to the nearest listed GEVO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are GEVO 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 GEVO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 96.60%), 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 GEVO butterfly?
- The breakeven for the GEVO 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 GEVO market-implied 1-standard-deviation expected move is approximately 27.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GEVO?
- Butterflies on GEVO are pinning bets - traders use them when they expect GEVO 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 GEVO implied volatility affect this butterfly?
- GEVO ATM IV is at 96.60% with IV rank near 24.68%, 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.