GILD Butterfly Strategy
GILD (Gilead Sciences, Inc.), in the Healthcare sector, (Drug Manufacturers - General industry), listed on NASDAQ.
Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally. The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/ Eviplera, Stribild, and Atripla products for the treatment of HIV/AIDS; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy, and Viread for the treatment of liver diseases. It also offers Yescarta, Tecartus, Trodelvy, and Zydelig products for the treatment of hematology, oncology, and cell therapy patients. In addition, the company provides Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; Ranexa, an oral formulation for the treatment of chronic angina; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. Gilead Sciences, Inc. has collaboration agreements with Arcus Biosciences, Inc.; Pionyr Immunotherapeutics Inc.; Tizona Therapeutics, Inc.; Tango Therapeutics, Inc.; Jounce Therapeutics, Inc.; Galapagos NV; Janssen Sciences Ireland Unlimited Company; Japan Tobacco, Inc.; Gadeta B.V.; Bristol-Myers Squibb Company; Dragonfly Therapeutics, Inc.; and Merck & Co, Inc. The company was incorporated in 1987 and is headquartered in Foster City, California.
GILD (Gilead Sciences, Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - General, with a market capitalization of approximately $165.19B, a trailing P/E of 17.93, a beta of 0.33 versus the broader market, a 52-week range of 97.86-157.29, average daily share volume of 6.2M, a public-listing history dating back to 1992, approximately 18K full-time employees. These structural characteristics shape how GILD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.33 indicates GILD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. GILD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GILD?
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 GILD snapshot
As of May 15, 2026, spot at $129.79, ATM IV 27.45%, IV rank 26.50%, expected move 7.87%. The butterfly on GILD 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 28-day expiry.
Why this butterfly structure on GILD specifically: GILD IV at 27.45% is on the cheap side of its 1-year range, which favors premium-buying structures like a GILD butterfly, with a market-implied 1-standard-deviation move of approximately 7.87% (roughly $10.21 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 GILD expiries trade a higher absolute premium for lower per-day decay. Position sizing on GILD should anchor to the underlying notional of $129.79 per share and to the trader's directional view on GILD stock.
GILD butterfly setup
The GILD 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 GILD near $129.79, the first option leg uses a $123.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GILD 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 GILD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $123.00 | $8.38 |
| Sell 2 | Call | $130.00 | $4.03 |
| Buy 1 | Call | $136.00 | $1.67 |
GILD butterfly risk and reward
- Net Premium / Debit
- -$199.00
- Max Profit (per contract)
- $456.28
- Max Loss (per contract)
- -$199.00
- Breakeven(s)
- $124.99, $135.01
- Risk / Reward Ratio
- 2.293
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.
GILD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GILD. 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% | -$199.00 |
| $28.71 | -77.9% | -$199.00 |
| $57.40 | -55.8% | -$199.00 |
| $86.10 | -33.7% | -$199.00 |
| $114.79 | -11.6% | -$199.00 |
| $143.49 | +10.6% | -$99.00 |
| $172.19 | +32.7% | -$99.00 |
| $200.88 | +54.8% | -$99.00 |
| $229.58 | +76.9% | -$99.00 |
| $258.28 | +99.0% | -$99.00 |
When traders use butterfly on GILD
Butterflies on GILD are pinning bets - traders use them when they expect GILD 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.
GILD thesis for this butterfly
The market-implied 1-standard-deviation range for GILD extends from approximately $119.58 on the downside to $140.00 on the upside. A GILD long call butterfly is a pinning play: it pays maximum at the middle strike if GILD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GILD IV rank near 26.50% 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 GILD at 27.45%. As a Healthcare name, GILD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GILD-specific events.
GILD 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. GILD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GILD alongside the broader basket even when GILD-specific fundamentals are unchanged. Always rebuild the position from current GILD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GILD?
- A butterfly on GILD is the butterfly strategy applied to GILD (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 GILD stock trading near $129.79, the strikes shown on this page are snapped to the nearest listed GILD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are GILD 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 GILD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.45%), the computed maximum profit is $456.28 per contract and the computed maximum loss is -$199.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GILD butterfly?
- The breakeven for the GILD butterfly priced on this page is roughly $124.99 and $135.01 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 GILD market-implied 1-standard-deviation expected move is approximately 7.87%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GILD?
- Butterflies on GILD are pinning bets - traders use them when they expect GILD 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 GILD implied volatility affect this butterfly?
- GILD ATM IV is at 27.45% with IV rank near 26.50%, 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.