GT Butterfly Strategy
GT (The Goodyear Tire & Rubber Company), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.
The Goodyear Tire & Rubber Company, along with its subsidiaries, functions as a global leader in the development, production, marketing, and sale of tires, alongside a suite of related products and services. Its diverse tire lineup caters to an extensive range of vehicles, from passenger automobiles, trucks, buses, and motorcycles to specialized equipment for aviation, earthmoving, mining, and industrial sectors. These products are offered under numerous proprietary brands, including Goodyear, Cooper, Dunlop, Kelly, Debica, Sava, Fulda, Mastercraft, and Roadmaster, as well as other house and private-label brands. Beyond new tire offerings, the company engages in the retreading of truck, aviation, and off-the-road tires, manufacturing and supplying essential retreading materials like tread rubber. It also distributes chemical and natural rubber products and delivers comprehensive maintenance and repair services for both automotive and commercial truck fleets, among other miscellaneous services. With approximately 1,000 retail outlets worldwide, Goodyear directly sells products and provides repair and other services to its customers.
GT (The Goodyear Tire & Rubber Company) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $1.74B, a beta of 1.12 versus the broader market, a 52-week range of 5.43-10.62, average daily share volume of 9.3M, a public-listing history dating back to 1927, approximately 63K full-time employees. These structural characteristics shape how GT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.12 places GT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on GT?
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.
GT snapshot
As of August 14, 2026, spot at $6.11, ATM IV 44.50%, IV rank 9.52%, expected move 12.76%. The butterfly on GT 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 GT specifically: GT IV at 44.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a GT butterfly, with a market-implied 1-standard-deviation move of approximately 12.76% (roughly $0.78 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 GT expiries trade a higher absolute premium for lower per-day decay. Position sizing on GT should anchor to the underlying notional of $6.11 per share and to the trader's directional view on GT stock.
GT butterfly setup
The GT 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 GT at $6.11 on that close, the first option leg uses a $5.80 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GT 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 GT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.80 | N/A |
| Sell 2 | Call | $6.11 | N/A |
| Buy 1 | Call | $6.42 | N/A |
GT 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.
GT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on GT. 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 GT
Butterflies on GT are pinning bets - traders use them when they expect GT 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.
GT thesis for this butterfly
The market-implied 1-standard-deviation range for GT extends from approximately $5.33 on the downside to $6.89 on the upside. A GT long call butterfly is a pinning play: it pays maximum at the middle strike if GT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GT IV rank near 9.52% 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 GT at 44.50%. As a Consumer Cyclical name, GT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GT-specific events.
GT 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. GT positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GT alongside the broader basket even when GT-specific fundamentals are unchanged. Always rebuild the position from current GT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on GT?
- A butterfly on GT is the butterfly strategy applied to GT (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 GT stock at $6.11 on the most recent close, the strikes shown on this page are snapped to the nearest listed GT chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GT 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 GT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 44.50%), 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 GT butterfly?
- The breakeven for the GT 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 GT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 12.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on GT?
- Butterflies on GT are pinning bets - traders use them when they expect GT 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 GT implied volatility affect this butterfly?
- GT ATM IV is at 44.50% with IV rank near 9.52%, 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.