HOMB Butterfly Strategy
HOMB (Home Bancshares, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
Home Bancshares, Inc. (Conway, AR) operates as the bank holding company for Centennial Bank that provides commercial and retail banking, and related financial services to businesses, real estate developers and investors, individuals, and municipalities. Its deposit products include checking, savings, and money market accounts, as well as certificates of deposit. The company's loan portfolio comprises non-farm/non-residential real estate, construction/land development, residential mortgage, consumer, agricultural, and commercial and industrial loans. It also provides internet banking, mobile banking and voice response information, cash management, overdraft protection, direct deposit, and automatic account transfer services, as well as safe deposit boxes and the United States savings bonds. In addition, the company writes policies for commercial and personal lines of business, including insurance for property, casualty, life, health, and employee benefits. As of December 31, 2021, it operated through 160 branch locations that included 76 branches in Arkansas, 78 branches in Florida, 5 branches in Alabama, and 1 branch in New York City.
HOMB (Home Bancshares, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $5.19B, a trailing P/E of 10.61, a beta of 0.69 versus the broader market, a 52-week range of 25.66-30.83, average daily share volume of 1.5M, a public-listing history dating back to 2006, approximately 3K full-time employees. These structural characteristics shape how HOMB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.69 indicates HOMB 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 10.61 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. HOMB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on HOMB?
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 HOMB snapshot
As of May 15, 2026, spot at $25.63, ATM IV 17.80%, IV rank 0.98%, expected move 5.10%. The butterfly on HOMB 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 HOMB specifically: HOMB IV at 17.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a HOMB butterfly, with a market-implied 1-standard-deviation move of approximately 5.10% (roughly $1.31 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 HOMB expiries trade a higher absolute premium for lower per-day decay. Position sizing on HOMB should anchor to the underlying notional of $25.63 per share and to the trader's directional view on HOMB stock.
HOMB butterfly setup
The HOMB 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 HOMB near $25.63, the first option leg uses a $24.35 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HOMB 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 HOMB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $24.35 | N/A |
| Sell 2 | Call | $25.63 | N/A |
| Buy 1 | Call | $26.91 | N/A |
HOMB 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.
HOMB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HOMB. 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 HOMB
Butterflies on HOMB are pinning bets - traders use them when they expect HOMB 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.
HOMB thesis for this butterfly
The market-implied 1-standard-deviation range for HOMB extends from approximately $24.32 on the downside to $26.94 on the upside. A HOMB long call butterfly is a pinning play: it pays maximum at the middle strike if HOMB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HOMB IV rank near 0.98% 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 HOMB at 17.80%. As a Financial Services name, HOMB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HOMB-specific events.
HOMB 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. HOMB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HOMB alongside the broader basket even when HOMB-specific fundamentals are unchanged. Always rebuild the position from current HOMB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HOMB?
- A butterfly on HOMB is the butterfly strategy applied to HOMB (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 HOMB stock trading near $25.63, the strikes shown on this page are snapped to the nearest listed HOMB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HOMB 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 HOMB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 17.80%), 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 HOMB butterfly?
- The breakeven for the HOMB 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 HOMB market-implied 1-standard-deviation expected move is approximately 5.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HOMB?
- Butterflies on HOMB are pinning bets - traders use them when they expect HOMB 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 HOMB implied volatility affect this butterfly?
- HOMB ATM IV is at 17.80% with IV rank near 0.98%, 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.