KRMN Butterfly Strategy
KRMN (Karman Holdings Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
Karman Holdings Inc., through its subsidiary, Karman Space and Defense, engages in designing, testing, manufacturing, and sale of mission-critical systems for missile and defense, space programs, hypersonic, and launch vehicle markets. It also supplies metallic and composite flight hardware and sub-assemblies. In addition, the company provides solutions for payload protection and deployment systems, aerodynamic interstage systems, and propulsion systems. The company was incorporated in 2020 and is based in Huntington Beach, California. Karman Holdings Inc. is a subsidiary of TCFIII Spaceco SPV LP.
KRMN (Karman Holdings Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $8.92B, a trailing P/E of 297.63, a beta of 0.68 versus the broader market, a 52-week range of 41.29-118.38, average daily share volume of 2.1M, a public-listing history dating back to 2025, approximately 1K full-time employees. These structural characteristics shape how KRMN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.68 indicates KRMN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 297.63 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on KRMN?
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 KRMN snapshot
As of May 15, 2026, spot at $64.02, ATM IV 74.10%, IV rank 22.98%, expected move 21.24%. The butterfly on KRMN 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 KRMN specifically: KRMN IV at 74.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a KRMN butterfly, with a market-implied 1-standard-deviation move of approximately 21.24% (roughly $13.60 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 KRMN expiries trade a higher absolute premium for lower per-day decay. Position sizing on KRMN should anchor to the underlying notional of $64.02 per share and to the trader's directional view on KRMN stock.
KRMN butterfly setup
The KRMN 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 KRMN near $64.02, the first option leg uses a $60.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KRMN 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 KRMN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $60.00 | $7.25 |
| Sell 2 | Call | $65.00 | $5.00 |
| Buy 1 | Call | $65.00 | $5.00 |
KRMN butterfly risk and reward
- Net Premium / Debit
- -$225.00
- Max Profit (per contract)
- $275.00
- Max Loss (per contract)
- -$225.00
- Breakeven(s)
- $62.25
- Risk / Reward Ratio
- 1.222
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.
KRMN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on KRMN. 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% | -$225.00 |
| $14.16 | -77.9% | -$225.00 |
| $28.32 | -55.8% | -$225.00 |
| $42.47 | -33.7% | -$225.00 |
| $56.63 | -11.5% | -$225.00 |
| $70.78 | +10.6% | +$275.00 |
| $84.93 | +32.7% | +$275.00 |
| $99.09 | +54.8% | +$275.00 |
| $113.24 | +76.9% | +$275.00 |
| $127.40 | +99.0% | +$275.00 |
When traders use butterfly on KRMN
Butterflies on KRMN are pinning bets - traders use them when they expect KRMN 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.
KRMN thesis for this butterfly
The market-implied 1-standard-deviation range for KRMN extends from approximately $50.42 on the downside to $77.62 on the upside. A KRMN long call butterfly is a pinning play: it pays maximum at the middle strike if KRMN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KRMN IV rank near 22.98% 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 KRMN at 74.10%. As a Industrials name, KRMN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KRMN-specific events.
KRMN 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. KRMN positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KRMN alongside the broader basket even when KRMN-specific fundamentals are unchanged. Always rebuild the position from current KRMN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on KRMN?
- A butterfly on KRMN is the butterfly strategy applied to KRMN (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 KRMN stock trading near $64.02, the strikes shown on this page are snapped to the nearest listed KRMN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KRMN 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 KRMN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 74.10%), the computed maximum profit is $275.00 per contract and the computed maximum loss is -$225.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KRMN butterfly?
- The breakeven for the KRMN butterfly priced on this page is roughly $62.25 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 KRMN market-implied 1-standard-deviation expected move is approximately 21.24%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on KRMN?
- Butterflies on KRMN are pinning bets - traders use them when they expect KRMN 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 KRMN implied volatility affect this butterfly?
- KRMN ATM IV is at 74.10% with IV rank near 22.98%, 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.