HPK Butterfly Strategy
HPK (HighPeak Energy, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NASDAQ.
HighPeak Energy, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids reserves in the Midland Basin in West Texas. As of December 31, 2021, the company had approximately 64,213 MBoe of proved reserves. HighPeak Energy, Inc. was incorporated in 2019 and is headquartered in Fort Worth, Texas.
HPK (HighPeak Energy, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $845.3M, a beta of 0.34 versus the broader market, a 52-week range of 3.85-12, average daily share volume of 1.0M, a public-listing history dating back to 2018, approximately 47 full-time employees. These structural characteristics shape how HPK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.34 indicates HPK has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. HPK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on HPK?
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 HPK snapshot
As of May 15, 2026, spot at $7.02, ATM IV 80.80%, IV rank 42.24%, expected move 23.16%. The butterfly on HPK 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 HPK specifically: HPK IV at 80.80% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 23.16% (roughly $1.63 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 HPK expiries trade a higher absolute premium for lower per-day decay. Position sizing on HPK should anchor to the underlying notional of $7.02 per share and to the trader's directional view on HPK stock.
HPK butterfly setup
The HPK 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 HPK near $7.02, the first option leg uses a $6.67 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HPK 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 HPK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $6.67 | N/A |
| Sell 2 | Call | $7.02 | N/A |
| Buy 1 | Call | $7.37 | N/A |
HPK 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.
HPK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HPK. 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 HPK
Butterflies on HPK are pinning bets - traders use them when they expect HPK 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.
HPK thesis for this butterfly
The market-implied 1-standard-deviation range for HPK extends from approximately $5.39 on the downside to $8.65 on the upside. A HPK long call butterfly is a pinning play: it pays maximum at the middle strike if HPK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HPK IV rank near 42.24% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on HPK should anchor more to the directional view and the expected-move geometry. As a Energy name, HPK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HPK-specific events.
HPK 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. HPK positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HPK alongside the broader basket even when HPK-specific fundamentals are unchanged. Always rebuild the position from current HPK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HPK?
- A butterfly on HPK is the butterfly strategy applied to HPK (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 HPK stock trading near $7.02, the strikes shown on this page are snapped to the nearest listed HPK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HPK 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 HPK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 80.80%), 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 HPK butterfly?
- The breakeven for the HPK 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 HPK market-implied 1-standard-deviation expected move is approximately 23.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HPK?
- Butterflies on HPK are pinning bets - traders use them when they expect HPK 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 HPK implied volatility affect this butterfly?
- HPK ATM IV is at 80.80% with IV rank near 42.24%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.