GNW Butterfly Strategy
GNW (Genworth Financial, Inc.), in the Financial Services sector, (Insurance - Diversified industry), listed on NYSE.
Genworth Financial, Inc., together with its subsidiaries, provides mortgage and long-term care insurance products in the United States. It operates through two segments: Enact and Closed Block. The company offers primary mortgage, and mortgage insurance products, and contract underwriting services. It also provides long-term care insurance products that are intended to protect against the significant and escalating costs of long-term care services provided in the insured’s home, assisted living, and nursing facilities. In addition, the company offers protection and retirement income products, that includes traditional and non-traditional life insurance, such as term, universal and term universal life insurance, corporate-owned life insurance, and funding agreements; fixed annuities; and variable annuities. It distributes its products through sales force, sales representatives, and digital marketing programs.
GNW (Genworth Financial, Inc.) trades in the Financial Services sector, specifically Insurance - Diversified, with a market capitalization of approximately $3.84B, a trailing P/E of 18.02, a beta of 0.86 versus the broader market, a 52-week range of 7.84-10.2, average daily share volume of 2.9M, a public-listing history dating back to 2004, approximately 3K full-time employees. These structural characteristics shape how GNW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.86 places GNW roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GNW pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GNW?
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.
GNW snapshot
As of August 14, 2026, spot at $10.14, ATM IV 13.20%, IV rank 2.45%, expected move 3.78%. The butterfly on GNW below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on GNW specifically: GNW IV at 13.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a GNW butterfly, with a market-implied 1-standard-deviation move of approximately 3.78% (roughly $0.38 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GNW expiries trade a higher absolute premium for lower per-day decay. Position sizing on GNW should anchor to the underlying notional of $10.14 per share and to the trader's directional view on GNW stock.
GNW butterfly setup
The GNW 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 GNW at $10.14 on that close, the first option leg uses a $9.63 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GNW chain at a 35-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 GNW shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $9.63 | N/A |
| Sell 2 | Call | $10.14 | N/A |
| Buy 1 | Call | $10.65 | N/A |
GNW 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.
GNW butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GNW. 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 GNW
Butterflies on GNW are pinning bets - traders use them when they expect GNW 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.
GNW thesis for this butterfly
The market-implied 1-standard-deviation range for GNW extends from approximately $9.76 on the downside to $10.52 on the upside. A GNW long call butterfly is a pinning play: it pays maximum at the middle strike if GNW settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GNW IV rank near 2.45% 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 GNW at 13.20%. As a Financial Services name, GNW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GNW-specific events.
GNW 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. GNW positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GNW alongside the broader basket even when GNW-specific fundamentals are unchanged. Always rebuild the position from current GNW chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GNW?
- A butterfly on GNW is the butterfly strategy applied to GNW (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 GNW stock at $10.14 on the most recent close, the strikes shown on this page are snapped to the nearest listed GNW chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GNW 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 GNW butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 13.20%), 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 GNW butterfly?
- The breakeven for the GNW butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 GNW market-implied 1-standard-deviation expected move in the same options snapshot is approximately 3.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GNW?
- Butterflies on GNW are pinning bets - traders use them when they expect GNW 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 GNW implied volatility affect this butterfly?
- GNW ATM IV is at 13.20% with IV rank near 2.45%, 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.