IR Butterfly Strategy
IR (Ingersoll Rand Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Ingersoll Rand Inc., established in 1859 and headquartered in Davidson, North Carolina, delivers essential air, fluid, energy, medical, and specialized vehicle technologies to customers across the United States, Europe, the Middle East, Africa, and the Asia Pacific regions. The company operates through two primary divisions: Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services division is responsible for the design, production, sales, and maintenance of various air and gas compression, vacuum, and blower solutions, alongside fluid handling and loading systems, power tools, and lifting apparatus. This segment also encompasses all related spare parts, consumables, air purification systems, controls, additional accessories, and support services. Meanwhile, the Precision and Science Technologies segment focuses on designing, manufacturing, and marketing a range of highly specialized positive displacement pumps, advanced fluid management systems, and their associated accessories and aftermarket parts. These solutions are critical for precise liquid and gas operations such as dosing, transfer, dispensing, compression, sampling, pressure regulation, and flow control in demanding or niche environments.
IR (Ingersoll Rand Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $32.61B, a trailing P/E of 34.07, a beta of 1.16 versus the broader market, a 52-week range of 68.07-100.96, average daily share volume of 4.1M, a public-listing history dating back to 2017, approximately 21K full-time employees. These structural characteristics shape how IR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.16 places IR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. IR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on IR?
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.
IR snapshot
As of August 14, 2026, spot at $83.50, ATM IV 28.30%, IV rank 9.46%, expected move 8.11%. The butterfly on IR 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 IR specifically: IR IV at 28.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a IR butterfly, with a market-implied 1-standard-deviation move of approximately 8.11% (roughly $6.77 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 IR expiries trade a higher absolute premium for lower per-day decay. Position sizing on IR should anchor to the underlying notional of $83.50 per share and to the trader's directional view on IR stock.
IR butterfly setup
The IR 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 IR at $83.50 on that close, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IR 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 IR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $5.90 |
| Sell 2 | Call | $85.00 | $2.38 |
| Buy 1 | Call | $90.00 | $1.25 |
IR butterfly risk and reward
- Net Premium / Debit
- -$240.00
- Max Profit (per contract)
- $236.37
- Max Loss (per contract)
- -$240.00
- Breakeven(s)
- $82.40, $87.60
- Risk / Reward Ratio
- 0.985
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.
IR butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on IR. 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% | -$240.00 |
| $18.47 | -77.9% | -$240.00 |
| $36.93 | -55.8% | -$240.00 |
| $55.39 | -33.7% | -$240.00 |
| $73.85 | -11.6% | -$240.00 |
| $92.32 | +10.6% | -$240.00 |
| $110.78 | +32.7% | -$240.00 |
| $129.24 | +54.8% | -$240.00 |
| $147.70 | +76.9% | -$240.00 |
| $166.16 | +99.0% | -$240.00 |
When traders use butterfly on IR
Butterflies on IR are pinning bets - traders use them when they expect IR 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.
IR thesis for this butterfly
The market-implied 1-standard-deviation range for IR extends from approximately $76.73 on the downside to $90.27 on the upside. A IR long call butterfly is a pinning play: it pays maximum at the middle strike if IR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current IR IV rank near 9.46% 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 IR at 28.30%. As a Industrials name, IR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IR-specific events.
IR 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. IR positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move IR alongside the broader basket even when IR-specific fundamentals are unchanged. Always rebuild the position from current IR chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on IR?
- A butterfly on IR is the butterfly strategy applied to IR (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 IR stock at $83.50 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed IR chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are IR 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 IR butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 28.30%), the computed maximum profit is $236.37 per contract and the computed maximum loss is -$240.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a IR butterfly?
- The breakeven for the IR butterfly priced on this page is roughly $82.40 and $87.60 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 IR market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on IR?
- Butterflies on IR are pinning bets - traders use them when they expect IR 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 IR implied volatility affect this butterfly?
- IR ATM IV is at 28.30% with IV rank near 9.46%, 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.