GLAD Butterfly Strategy
GLAD (Gladstone Capital Corporation), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Gladstone Capital Corporation is a business development company specializing in lower middle market, growth capital, add on acquisitions, change of control, buy & build strategies, debt refinancing, debt investments in senior term loans, revolving loans, secured first and second lien term loans, senior subordinated loans, unitranche loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. It operates as a business development company. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. It is industry agnostic and seeks to invest in companies engaged in the business services, light and specialty manufacturing, niche industrial products and services, specialty consumer products and services, energy services, transportation and logistics, healthcare and education services, specialty chemicals, media and communications and aerospace and defense. The fund seeks to invest between $7 million and $30 million in companies that have between $20 million and $150 million in sales and EBITDA between $3 million and $25 million.
GLAD (Gladstone Capital Corporation) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $434.5M, a trailing P/E of 9.89, a beta of 0.92 versus the broader market, a 52-week range of 16.54-29.5, average daily share volume of 224K, a public-listing history dating back to 2002, approximately 73 full-time employees. These structural characteristics shape how GLAD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.92 places GLAD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.89 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. GLAD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GLAD?
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 GLAD snapshot
As of May 15, 2026, spot at $19.27, ATM IV 14.40%, IV rank 1.81%, expected move 4.13%. The butterfly on GLAD 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 GLAD specifically: GLAD IV at 14.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a GLAD butterfly, with a market-implied 1-standard-deviation move of approximately 4.13% (roughly $0.80 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 GLAD expiries trade a higher absolute premium for lower per-day decay. Position sizing on GLAD should anchor to the underlying notional of $19.27 per share and to the trader's directional view on GLAD stock.
GLAD butterfly setup
The GLAD 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 GLAD near $19.27, the first option leg uses a $18.31 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GLAD 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 GLAD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $18.31 | N/A |
| Sell 2 | Call | $19.27 | N/A |
| Buy 1 | Call | $20.23 | N/A |
GLAD 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.
GLAD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GLAD. 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 GLAD
Butterflies on GLAD are pinning bets - traders use them when they expect GLAD 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.
GLAD thesis for this butterfly
The market-implied 1-standard-deviation range for GLAD extends from approximately $18.47 on the downside to $20.07 on the upside. A GLAD long call butterfly is a pinning play: it pays maximum at the middle strike if GLAD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GLAD IV rank near 1.81% 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 GLAD at 14.40%. As a Financial Services name, GLAD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GLAD-specific events.
GLAD 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. GLAD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GLAD alongside the broader basket even when GLAD-specific fundamentals are unchanged. Always rebuild the position from current GLAD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GLAD?
- A butterfly on GLAD is the butterfly strategy applied to GLAD (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 GLAD stock trading near $19.27, the strikes shown on this page are snapped to the nearest listed GLAD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are GLAD 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 GLAD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 14.40%), 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 GLAD butterfly?
- The breakeven for the GLAD 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 GLAD market-implied 1-standard-deviation expected move is approximately 4.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GLAD?
- Butterflies on GLAD are pinning bets - traders use them when they expect GLAD 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 GLAD implied volatility affect this butterfly?
- GLAD ATM IV is at 14.40% with IV rank near 1.81%, 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.