KRMD Butterfly Strategy
KRMD (KORU Medical Systems, Inc.), in the Healthcare sector, (Medical - Instruments & Supplies industry), listed on NASDAQ.
KORU Medical Systems, Inc. designs, manufactures, and markets portable medical devices primarily for the ambulatory infusion market in the United States and internationally. It offers mechanical infusion product comprising the FREEDOM infusion systems that include the FREEDOM60 syringe driver, the FreedomEdge syringe driver, HIgH-Flo subcutaneous safety needle sets, and precision flow rate tubing. The company also provides education and training materials to clinicians, patients, and patient advocates. It sells its products through direct sales and medical device distributors, as well as online. KORU Medical Systems, Inc. was incorporated in 1980 and is headquartered in Chester, New York.
KRMD (KORU Medical Systems, Inc.) trades in the Healthcare sector, specifically Medical - Instruments & Supplies, with a market capitalization of approximately $176.8M, a beta of 0.42 versus the broader market, a 52-week range of 2.625-6.608, average daily share volume of 154K, a public-listing history dating back to 1994, approximately 80 full-time employees. These structural characteristics shape how KRMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.42 indicates KRMD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on KRMD?
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 KRMD snapshot
As of May 15, 2026, spot at $3.92, ATM IV 24.10%, IV rank 0.78%, expected move 6.91%. The butterfly on KRMD 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 KRMD specifically: KRMD IV at 24.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a KRMD butterfly, with a market-implied 1-standard-deviation move of approximately 6.91% (roughly $0.27 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 KRMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on KRMD should anchor to the underlying notional of $3.92 per share and to the trader's directional view on KRMD stock.
KRMD butterfly setup
The KRMD 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 KRMD near $3.92, the first option leg uses a $3.72 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KRMD 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 KRMD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.72 | N/A |
| Sell 2 | Call | $3.92 | N/A |
| Buy 1 | Call | $4.12 | N/A |
KRMD 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.
KRMD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on KRMD. 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 KRMD
Butterflies on KRMD are pinning bets - traders use them when they expect KRMD 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.
KRMD thesis for this butterfly
The market-implied 1-standard-deviation range for KRMD extends from approximately $3.65 on the downside to $4.19 on the upside. A KRMD long call butterfly is a pinning play: it pays maximum at the middle strike if KRMD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KRMD IV rank near 0.78% 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 KRMD at 24.10%. As a Healthcare name, KRMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KRMD-specific events.
KRMD 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. KRMD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KRMD alongside the broader basket even when KRMD-specific fundamentals are unchanged. Always rebuild the position from current KRMD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on KRMD?
- A butterfly on KRMD is the butterfly strategy applied to KRMD (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 KRMD stock trading near $3.92, the strikes shown on this page are snapped to the nearest listed KRMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KRMD 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 KRMD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.10%), 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 KRMD butterfly?
- The breakeven for the KRMD 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 KRMD market-implied 1-standard-deviation expected move is approximately 6.91%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on KRMD?
- Butterflies on KRMD are pinning bets - traders use them when they expect KRMD 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 KRMD implied volatility affect this butterfly?
- KRMD ATM IV is at 24.10% with IV rank near 0.78%, 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.