INSP Butterfly Strategy
INSP (Inspire Medical Systems, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NYSE.
Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally. The company offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. It also develops a novel, a closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.
INSP (Inspire Medical Systems, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $1.21B, a trailing P/E of 9.17, a beta of 0.83 versus the broader market, a 52-week range of 41.55-156.815, average daily share volume of 1.2M, a public-listing history dating back to 2018, approximately 1K full-time employees. These structural characteristics shape how INSP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places INSP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.17 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on INSP?
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 INSP snapshot
As of May 15, 2026, spot at $40.30, ATM IV 72.40%, IV rank 30.47%, expected move 20.76%. The butterfly on INSP 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 98-day expiry.
Why this butterfly structure on INSP specifically: INSP IV at 72.40% 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 20.76% (roughly $8.36 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated INSP expiries trade a higher absolute premium for lower per-day decay. Position sizing on INSP should anchor to the underlying notional of $40.30 per share and to the trader's directional view on INSP stock.
INSP butterfly setup
The INSP 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 INSP near $40.30, the first option leg uses a $38.29 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed INSP chain at a 98-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 INSP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $38.29 | N/A |
| Sell 2 | Call | $40.30 | N/A |
| Buy 1 | Call | $42.32 | N/A |
INSP 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.
INSP butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on INSP. 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 INSP
Butterflies on INSP are pinning bets - traders use them when they expect INSP 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.
INSP thesis for this butterfly
The market-implied 1-standard-deviation range for INSP extends from approximately $31.94 on the downside to $48.66 on the upside. A INSP long call butterfly is a pinning play: it pays maximum at the middle strike if INSP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current INSP IV rank near 30.47% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on INSP should anchor more to the directional view and the expected-move geometry. As a Healthcare name, INSP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to INSP-specific events.
INSP 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. INSP positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move INSP alongside the broader basket even when INSP-specific fundamentals are unchanged. Always rebuild the position from current INSP chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on INSP?
- A butterfly on INSP is the butterfly strategy applied to INSP (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 INSP stock trading near $40.30, the strikes shown on this page are snapped to the nearest listed INSP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are INSP 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 INSP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 72.40%), 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 INSP butterfly?
- The breakeven for the INSP 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 INSP market-implied 1-standard-deviation expected move is approximately 20.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on INSP?
- Butterflies on INSP are pinning bets - traders use them when they expect INSP 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 INSP implied volatility affect this butterfly?
- INSP ATM IV is at 72.40% with IV rank near 30.47%, 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.