HRZN Butterfly Strategy
HRZN (Horizon Technology Finance Corporation), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.
HRZN (Horizon Technology Finance Corporation) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $186.2M, a trailing P/E of 9.26, a beta of 0.97 versus the broader market, a 52-week range of 3.8-8.46, average daily share volume of 1.1M, a public-listing history dating back to 2010. These structural characteristics shape how HRZN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.97 places HRZN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.26 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. HRZN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on HRZN?
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 HRZN snapshot
As of May 15, 2026, spot at $4.29, ATM IV 29.40%, IV rank 10.55%, expected move 8.43%. The butterfly on HRZN 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 HRZN specifically: HRZN IV at 29.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a HRZN butterfly, with a market-implied 1-standard-deviation move of approximately 8.43% (roughly $0.36 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 HRZN expiries trade a higher absolute premium for lower per-day decay. Position sizing on HRZN should anchor to the underlying notional of $4.29 per share and to the trader's directional view on HRZN stock.
HRZN butterfly setup
The HRZN 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 HRZN near $4.29, the first option leg uses a $4.08 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HRZN 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 HRZN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $4.08 | N/A |
| Sell 2 | Call | $4.29 | N/A |
| Buy 1 | Call | $4.50 | N/A |
HRZN 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.
HRZN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on HRZN. 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 HRZN
Butterflies on HRZN are pinning bets - traders use them when they expect HRZN 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.
HRZN thesis for this butterfly
The market-implied 1-standard-deviation range for HRZN extends from approximately $3.93 on the downside to $4.65 on the upside. A HRZN long call butterfly is a pinning play: it pays maximum at the middle strike if HRZN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HRZN IV rank near 10.55% 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 HRZN at 29.40%. As a Financial Services name, HRZN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HRZN-specific events.
HRZN 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. HRZN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HRZN alongside the broader basket even when HRZN-specific fundamentals are unchanged. Always rebuild the position from current HRZN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on HRZN?
- A butterfly on HRZN is the butterfly strategy applied to HRZN (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 HRZN stock trading near $4.29, the strikes shown on this page are snapped to the nearest listed HRZN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HRZN 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 HRZN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.40%), 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 HRZN butterfly?
- The breakeven for the HRZN 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 HRZN market-implied 1-standard-deviation expected move is approximately 8.43%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on HRZN?
- Butterflies on HRZN are pinning bets - traders use them when they expect HRZN 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 HRZN implied volatility affect this butterfly?
- HRZN ATM IV is at 29.40% with IV rank near 10.55%, 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.