HDSN Butterfly Strategy
HDSN (Hudson Technologies, Inc.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NASDAQ.
Hudson Technologies, Inc. (HDSN) operates as a dedicated provider of specialized refrigerant services, addressing persistent issues within the refrigeration industry, primarily throughout the United States. The company's core business involves the sale of refrigerants and various industrial gases. It also delivers a comprehensive range of refrigerant management solutions, including the recovery and reprocessing of used refrigerants, the refurbishment of reusable cylinders, and hydrostatic testing. Furthermore, Hudson offers "RefrigerantSide" services, which focus on deep system decontamination to eliminate moisture, oils, and other harmful contaminants from refrigeration systems. Beyond these offerings, Hudson provides its SmartEnergy OPS service, a proprietary web-based platform designed for continuous, real-time monitoring of refrigeration and other energy systems. Additional specialized services encompass Chiller Chemistry and Chill Smart programs.
HDSN (Hudson Technologies, Inc.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $233.9M, a trailing P/E of 16.53, a beta of 0.79 versus the broader market, a 52-week range of 4.64-10.52, average daily share volume of 444K, a public-listing history dating back to 1994, approximately 238 full-time employees. These structural characteristics shape how HDSN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.79 places HDSN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on HDSN?
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 HDSN snapshot
As of June 29, 2026, spot at $5.50, ATM IV 64.60%, IV rank 9.08%, expected move 18.52%. The butterfly on HDSN 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 18-day expiry.
Why this butterfly structure on HDSN specifically: HDSN IV at 64.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a HDSN butterfly, with a market-implied 1-standard-deviation move of approximately 18.52% (roughly $1.02 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated HDSN expiries trade a higher absolute premium for lower per-day decay. Position sizing on HDSN should anchor to the underlying notional of $5.50 per share and to the trader's directional view on HDSN stock.
HDSN butterfly setup
The HDSN 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 HDSN near $5.50, the first option leg uses a $5.23 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HDSN chain at a 18-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 HDSN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.23 | N/A |
| Sell 2 | Call | $5.50 | N/A |
| Buy 1 | Call | $5.78 | N/A |
HDSN 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.
HDSN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HDSN. 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 HDSN
Butterflies on HDSN are pinning bets - traders use them when they expect HDSN 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.
HDSN thesis for this butterfly
The market-implied 1-standard-deviation range for HDSN extends from approximately $4.48 on the downside to $6.52 on the upside. A HDSN long call butterfly is a pinning play: it pays maximum at the middle strike if HDSN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HDSN IV rank near 9.08% 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 HDSN at 64.60%. As a Basic Materials name, HDSN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HDSN-specific events.
HDSN 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. HDSN positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HDSN alongside the broader basket even when HDSN-specific fundamentals are unchanged. Always rebuild the position from current HDSN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HDSN?
- A butterfly on HDSN is the butterfly strategy applied to HDSN (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 HDSN stock trading near $5.50, the strikes shown on this page are snapped to the nearest listed HDSN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HDSN 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 HDSN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 64.60%), 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 HDSN butterfly?
- The breakeven for the HDSN 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 HDSN market-implied 1-standard-deviation expected move is approximately 18.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HDSN?
- Butterflies on HDSN are pinning bets - traders use them when they expect HDSN 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 HDSN implied volatility affect this butterfly?
- HDSN ATM IV is at 64.60% with IV rank near 9.08%, 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.