LTRX Butterfly Strategy
LTRX (Lantronix, Inc.), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.
Lantronix, Inc. is a technology company specializing in the delivery of hardware, software-as-a-service (SaaS), and professional engineering services. Its solutions are designed to support edge computing, the Internet of Things (IoT), and remote environment management (REM) for clients across the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. Within its IoT portfolio, Lantronix offers a diverse range of products, categorized broadly into Connectivity, Compute, and Telematics solutions. Its IoT Connectivity offerings facilitate robust wired and wireless connections, significantly boosting the functionality and effectiveness of contemporary electronic systems. These solutions encompass secure network access, Power over Ethernet (PoE) for device power, application hosting, and essential protocol and media conversion, ensuring secure and efficient operation for geographically dispersed IoT implementations. The IoT Compute segment delivers processing power tailored to customer demands for advanced data transformation, computer vision, machine learning, augmented/virtual reality (AR/VR) applications, as well as audio/video aggregation, distribution, and bespoke software solutions.
LTRX (Lantronix, Inc.) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $246.7M, a beta of 1.66 versus the broader market, a 52-week range of 2.76-8.75, average daily share volume of 1.1M, a public-listing history dating back to 2000, approximately 367 full-time employees. These structural characteristics shape how LTRX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.66 indicates LTRX has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on LTRX?
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 LTRX snapshot
As of June 29, 2026, spot at $5.58, ATM IV 76.20%, IV rank 22.11%, expected move 21.85%. The butterfly on LTRX 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 18-day expiry.
Why this butterfly structure on LTRX specifically: LTRX IV at 76.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a LTRX butterfly, with a market-implied 1-standard-deviation move of approximately 21.85% (roughly $1.22 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LTRX expiries trade a higher absolute premium for lower per-day decay. Position sizing on LTRX should anchor to the underlying notional of $5.58 per share and to the trader's directional view on LTRX stock.
LTRX butterfly setup
The LTRX 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 LTRX near $5.58, the first option leg uses a $5.30 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LTRX chain at a 18-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 LTRX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.30 | N/A |
| Sell 2 | Call | $5.58 | N/A |
| Buy 1 | Call | $5.86 | N/A |
LTRX 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.
LTRX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on LTRX. 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 LTRX
Butterflies on LTRX are pinning bets - traders use them when they expect LTRX 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.
LTRX thesis for this butterfly
The market-implied 1-standard-deviation range for LTRX extends from approximately $4.36 on the downside to $6.80 on the upside. A LTRX long call butterfly is a pinning play: it pays maximum at the middle strike if LTRX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LTRX IV rank near 22.11% 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 LTRX at 76.20%. As a Technology name, LTRX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LTRX-specific events.
LTRX 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. LTRX positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LTRX alongside the broader basket even when LTRX-specific fundamentals are unchanged. Always rebuild the position from current LTRX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on LTRX?
- A butterfly on LTRX is the butterfly strategy applied to LTRX (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 LTRX stock trading near $5.58, the strikes shown on this page are snapped to the nearest listed LTRX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LTRX 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 LTRX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 76.20%), 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 LTRX butterfly?
- The breakeven for the LTRX 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 LTRX market-implied 1-standard-deviation expected move is approximately 21.85%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on LTRX?
- Butterflies on LTRX are pinning bets - traders use them when they expect LTRX 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 LTRX implied volatility affect this butterfly?
- LTRX ATM IV is at 76.20% with IV rank near 22.11%, 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.