HNRG Butterfly Strategy
HNRG (Hallador Energy Company), in the Energy sector, (Coal industry), listed on NASDAQ.
Hallador Energy Company, through its subsidiaries, engages in the production of steam coal in the State of Indiana for the electric power generation industry. The company owns the Oaktown Mine 1 and Oaktown Mine 2 underground mines in Oaktown, Indiana; and Ace in the Hole mine located near Clay City, Indiana. It is also involved in gas exploration activities in Indiana. Hallador Energy Company was founded in 1949 and is headquartered in Terre Haute, Indiana.
HNRG (Hallador Energy Company) trades in the Energy sector, specifically Coal, with a market capitalization of approximately $915.3M, a trailing P/E of 40.02, a beta of 0.16 versus the broader market, a 52-week range of 14.42-24.7, average daily share volume of 938K, a public-listing history dating back to 1994, approximately 615 full-time employees. These structural characteristics shape how HNRG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.16 indicates HNRG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 40.02 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on HNRG?
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 HNRG snapshot
As of May 15, 2026, spot at $18.41, ATM IV 68.00%, IV rank 20.25%, expected move 19.50%. The butterfly on HNRG 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 HNRG specifically: HNRG IV at 68.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a HNRG butterfly, with a market-implied 1-standard-deviation move of approximately 19.50% (roughly $3.59 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 HNRG expiries trade a higher absolute premium for lower per-day decay. Position sizing on HNRG should anchor to the underlying notional of $18.41 per share and to the trader's directional view on HNRG stock.
HNRG butterfly setup
The HNRG 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 HNRG near $18.41, the first option leg uses a $17.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HNRG 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 HNRG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $17.00 | $2.38 |
| Sell 2 | Call | $18.00 | $1.78 |
| Buy 1 | Call | $19.00 | $1.25 |
HNRG butterfly risk and reward
- Net Premium / Debit
- -$7.50
- Max Profit (per contract)
- $87.76
- Max Loss (per contract)
- -$7.50
- Breakeven(s)
- $17.08, $18.95
- Risk / Reward Ratio
- 11.701
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.
HNRG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HNRG. 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 | -99.9% | -$7.50 |
| $4.08 | -77.8% | -$7.50 |
| $8.15 | -55.7% | -$7.50 |
| $12.22 | -33.6% | -$7.50 |
| $16.29 | -11.5% | -$7.50 |
| $20.36 | +10.6% | -$7.50 |
| $24.43 | +32.7% | -$7.50 |
| $28.50 | +54.8% | -$7.50 |
| $32.57 | +76.9% | -$7.50 |
| $36.64 | +99.0% | -$7.50 |
When traders use butterfly on HNRG
Butterflies on HNRG are pinning bets - traders use them when they expect HNRG 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.
HNRG thesis for this butterfly
The market-implied 1-standard-deviation range for HNRG extends from approximately $14.82 on the downside to $22.00 on the upside. A HNRG long call butterfly is a pinning play: it pays maximum at the middle strike if HNRG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HNRG IV rank near 20.25% 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 HNRG at 68.00%. As a Energy name, HNRG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HNRG-specific events.
HNRG 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. HNRG positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HNRG alongside the broader basket even when HNRG-specific fundamentals are unchanged. Always rebuild the position from current HNRG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HNRG?
- A butterfly on HNRG is the butterfly strategy applied to HNRG (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 HNRG stock trading near $18.41, the strikes shown on this page are snapped to the nearest listed HNRG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HNRG 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 HNRG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 68.00%), the computed maximum profit is $87.76 per contract and the computed maximum loss is -$7.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HNRG butterfly?
- The breakeven for the HNRG butterfly priced on this page is roughly $17.08 and $18.95 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 HNRG market-implied 1-standard-deviation expected move is approximately 19.50%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HNRG?
- Butterflies on HNRG are pinning bets - traders use them when they expect HNRG 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 HNRG implied volatility affect this butterfly?
- HNRG ATM IV is at 68.00% with IV rank near 20.25%, 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.