GRC Butterfly Strategy
GRC (The Gorman-Rupp Company), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
The Gorman-Rupp Company specializes in the design, production, and distribution of a broad spectrum of pumps and associated systems, serving markets both within the United States and globally. Their comprehensive portfolio encompasses a wide array of pump types, such as self-priming, standard, and magnetic drive centrifugal units; axial and mixed flow designs; vertical turbine line shaft, submersible, and high-pressure booster pumps; alongside rotary gear, diaphragm, bellows, and oscillating models. These versatile solutions are essential across numerous sectors, including municipal water and wastewater management, building and infrastructure projects, dewatering operations, diverse industrial processes, the petroleum industry, original equipment manufacturing (OEM), agricultural irrigation, fire suppression systems, military applications, and general fluid transfer, including heating, ventilating, and air conditioning (HVAC). To reach its diverse clientele, the company employs a multi-channel sales strategy, leveraging an established network of distributors and independent manufacturers' representatives, sales via third-party catalogs, direct engagement with customers, and e-commerce platforms. Established in 1933, The Gorman-Rupp Company maintains its corporate headquarters in Mansfield, Ohio.
GRC (The Gorman-Rupp Company) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $2.15B, a trailing P/E of 34.47, a beta of 1.30 versus the broader market, a 52-week range of 41.02-92.78, average daily share volume of 184K, a public-listing history dating back to 1980, approximately 1K full-time employees. These structural characteristics shape how GRC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 places GRC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GRC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GRC?
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.
GRC snapshot
As of August 14, 2026, spot at $80.68, ATM IV 37.00%, IV rank 13.53%, expected move 10.61%. The butterfly on GRC below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 126-day expiry.
Why this butterfly structure on GRC specifically: GRC IV at 37.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a GRC butterfly, with a market-implied 1-standard-deviation move of approximately 10.61% (roughly $8.56 on the underlying). The 126-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GRC expiries trade a higher absolute premium for lower per-day decay. Position sizing on GRC should anchor to the underlying notional of $80.68 per share and to the trader's directional view on GRC stock.
GRC butterfly setup
The GRC butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With GRC at $80.68 on that close, the first option leg uses a $75.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GRC chain at a 126-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 GRC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $75.00 | $10.45 |
| Sell 2 | Call | $80.00 | $7.50 |
| Buy 1 | Call | $85.00 | $5.60 |
GRC butterfly risk and reward
- Net Premium / Debit
- -$105.00
- Max Profit (per contract)
- $367.04
- Max Loss (per contract)
- -$105.00
- Breakeven(s)
- $76.05, $83.95
- Risk / Reward Ratio
- 3.496
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.
GRC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GRC. 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% | -$105.00 |
| $17.85 | -77.9% | -$105.00 |
| $35.69 | -55.8% | -$105.00 |
| $53.52 | -33.7% | -$105.00 |
| $71.36 | -11.6% | -$105.00 |
| $89.20 | +10.6% | -$105.00 |
| $107.04 | +32.7% | -$105.00 |
| $124.87 | +54.8% | -$105.00 |
| $142.71 | +76.9% | -$105.00 |
| $160.55 | +99.0% | -$105.00 |
When traders use butterfly on GRC
Butterflies on GRC are pinning bets - traders use them when they expect GRC 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.
GRC thesis for this butterfly
The market-implied 1-standard-deviation range for GRC extends from approximately $72.12 on the downside to $89.24 on the upside. A GRC long call butterfly is a pinning play: it pays maximum at the middle strike if GRC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GRC IV rank near 13.53% 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 GRC at 37.00%. As a Industrials name, GRC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GRC-specific events.
GRC 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. GRC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GRC alongside the broader basket even when GRC-specific fundamentals are unchanged. Always rebuild the position from current GRC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GRC?
- A butterfly on GRC is the butterfly strategy applied to GRC (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 GRC stock at $80.68 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed GRC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GRC 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 GRC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.00%), the computed maximum profit is $367.04 per contract and the computed maximum loss is -$105.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GRC butterfly?
- The breakeven for the GRC butterfly priced on this page is roughly $76.05 and $83.95 at expiration, derived from the August 14, 2026 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 GRC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GRC?
- Butterflies on GRC are pinning bets - traders use them when they expect GRC 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 GRC implied volatility affect this butterfly?
- GRC ATM IV is at 37.00% with IV rank near 13.53%, 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.