KIDS Butterfly Strategy
KIDS (OrthoPediatrics Corp.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
OrthoPediatrics Corp. is a medical technology firm dedicated to the design, development, and global commercialization of specialized implants and devices. These products are meticulously crafted to be anatomically appropriate for treating children affected by orthopedic conditions across the United States and internationally. The company's diverse offerings span products for trauma and deformity correction, surgical systems for spinal deformities such as scoliosis, and solutions for sports medicine, among others. Their comprehensive product line features items like PediLoc, PediPlates, various cannulated screws, the PediFlex and PediNail systems, PediLoc tibia, advanced anterior cruciate ligament reconstruction systems, specialized locking cannulated blades and proximal femurs, Spica Tables, RESPONSE Spine systems, Bandloc, Pediguard, the Pediatric Nailing Platform, Femur system, Orthex, QuickPack, and the ApiFix Mid-C system. OrthoPediatrics Corp. primarily serves the pediatric orthopedic market, directly assisting pediatric orthopedic surgeons and caregivers. The company was founded in 2006 and maintains its headquarters in Warsaw, Indiana.
KIDS (OrthoPediatrics Corp.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $521.4M, a beta of 1.02 versus the broader market, a 52-week range of 14.42-23.7, average daily share volume of 161K, a public-listing history dating back to 2017, approximately 562 full-time employees. These structural characteristics shape how KIDS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.02 places KIDS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on KIDS?
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 KIDS snapshot
As of June 26, 2026, spot at $20.08, ATM IV 67.30%, IV rank 15.06%, expected move 19.29%. The butterfly on KIDS 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 21-day expiry.
Why this butterfly structure on KIDS specifically: KIDS IV at 67.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a KIDS butterfly, with a market-implied 1-standard-deviation move of approximately 19.29% (roughly $3.87 on the underlying). The 21-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KIDS expiries trade a higher absolute premium for lower per-day decay. Position sizing on KIDS should anchor to the underlying notional of $20.08 per share and to the trader's directional view on KIDS stock.
KIDS butterfly setup
The KIDS 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 KIDS near $20.08, the first option leg uses a $19.08 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KIDS chain at a 21-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 KIDS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $19.08 | N/A |
| Sell 2 | Call | $20.08 | N/A |
| Buy 1 | Call | $21.08 | N/A |
KIDS 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.
KIDS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on KIDS. 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 KIDS
Butterflies on KIDS are pinning bets - traders use them when they expect KIDS 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.
KIDS thesis for this butterfly
The market-implied 1-standard-deviation range for KIDS extends from approximately $16.21 on the downside to $23.95 on the upside. A KIDS long call butterfly is a pinning play: it pays maximum at the middle strike if KIDS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KIDS IV rank near 15.06% 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 KIDS at 67.30%. As a Healthcare name, KIDS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KIDS-specific events.
KIDS 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. KIDS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KIDS alongside the broader basket even when KIDS-specific fundamentals are unchanged. Always rebuild the position from current KIDS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on KIDS?
- A butterfly on KIDS is the butterfly strategy applied to KIDS (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 KIDS stock trading near $20.08, the strikes shown on this page are snapped to the nearest listed KIDS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KIDS 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 KIDS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 67.30%), 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 KIDS butterfly?
- The breakeven for the KIDS 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 KIDS market-implied 1-standard-deviation expected move is approximately 19.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on KIDS?
- Butterflies on KIDS are pinning bets - traders use them when they expect KIDS 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 KIDS implied volatility affect this butterfly?
- KIDS ATM IV is at 67.30% with IV rank near 15.06%, 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.