ILMN Butterfly Strategy
ILMN (Illumina, Inc.), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NASDAQ.
Illumina, Inc. specializes in delivering advanced genetic and genomic analysis tools, primarily through sequencing and array technologies. The company's offerings empower clients across various sectors to integrate genomic insights into both research and clinical environments, with applications spanning critical fields like life sciences, cancer diagnostics, reproductive health, agriculture, and innovative new domains. Illumina's portfolio encompasses specialized instrumentation and necessary consumables for genetic analysis, alongside comprehensive genotyping and sequencing services. They also offer instrument maintenance agreements, collaborate through development and licensing deals, and perform cancer detection tests. Its diverse clientele comprises leading genomic research facilities, universities, state-funded laboratories, medical centers, pharmaceutical and biotechnology firms, commercial molecular diagnostic providers, and businesses focused on consumer genomics. Illumina employs a two-pronged distribution strategy, selling directly to clients across North America, Europe, Latin America, and the Asia-Pacific.
ILMN (Illumina, Inc.) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $28.88B, a trailing P/E of 34.94, a beta of 1.46 versus the broader market, a 52-week range of 88-207, average daily share volume of 1.9M, a public-listing history dating back to 2000, approximately 9K full-time employees. These structural characteristics shape how ILMN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.46 indicates ILMN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on ILMN?
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.
ILMN snapshot
As of August 14, 2026, spot at $190.56, ATM IV 41.00%, IV rank 8.67%, expected move 11.75%. The butterfly on ILMN below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on ILMN specifically: ILMN IV at 41.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a ILMN butterfly, with a market-implied 1-standard-deviation move of approximately 11.75% (roughly $22.40 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ILMN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ILMN should anchor to the underlying notional of $190.56 per share and to the trader's directional view on ILMN stock.
ILMN butterfly setup
The ILMN butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ILMN at $190.56 on that close, the first option leg uses a $180.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ILMN chain at a 35-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 ILMN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $180.00 | $16.95 |
| Sell 2 | Call | $190.00 | $11.05 |
| Buy 1 | Call | $200.00 | $6.30 |
ILMN butterfly risk and reward
- Net Premium / Debit
- -$115.00
- Max Profit (per contract)
- $845.74
- Max Loss (per contract)
- -$115.00
- Breakeven(s)
- $181.15, $198.85
- Risk / Reward Ratio
- 7.354
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.
ILMN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ILMN. 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 | -100.0% | -$115.00 |
| $42.14 | -77.9% | -$115.00 |
| $84.28 | -55.8% | -$115.00 |
| $126.41 | -33.7% | -$115.00 |
| $168.54 | -11.6% | -$115.00 |
| $210.67 | +10.6% | -$115.00 |
| $252.81 | +32.7% | -$115.00 |
| $294.94 | +54.8% | -$115.00 |
| $337.07 | +76.9% | -$115.00 |
| $379.20 | +99.0% | -$115.00 |
When traders use butterfly on ILMN
Butterflies on ILMN are pinning bets - traders use them when they expect ILMN 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.
ILMN thesis for this butterfly
The market-implied 1-standard-deviation range for ILMN extends from approximately $168.16 on the downside to $212.96 on the upside. A ILMN long call butterfly is a pinning play: it pays maximum at the middle strike if ILMN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ILMN IV rank near 8.67% 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 ILMN at 41.00%. As a Healthcare name, ILMN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ILMN-specific events.
ILMN 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. ILMN positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ILMN alongside the broader basket even when ILMN-specific fundamentals are unchanged. Always rebuild the position from current ILMN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ILMN?
- A butterfly on ILMN is the butterfly strategy applied to ILMN (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 ILMN stock at $190.56 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ILMN chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ILMN 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 ILMN butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 41.00%), the computed maximum profit is $845.74 per contract and the computed maximum loss is -$115.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ILMN butterfly?
- The breakeven for the ILMN butterfly priced on this page is roughly $181.15 and $198.85 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The ILMN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.75%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ILMN?
- Butterflies on ILMN are pinning bets - traders use them when they expect ILMN 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 ILMN implied volatility affect this butterfly?
- ILMN ATM IV is at 41.00% with IV rank near 8.67%, 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.