LUNG Butterfly Strategy
LUNG (Pulmonx Corporation), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Pulmonx Corporation, a medical technology company, provides minimally invasive devices for the treatment of chronic obstructive pulmonary diseases. It offers Zephyr Endobronchial Valve, a solution for the treatment of bronchoscopic in adult patients with hyperinflation associated with severe emphysema; and Chartis Pulmonary Assessment System, a balloon catheter and console system with flow and pressure sensors that are used to assess the presence of collateral ventilation. The company also provides StratX Lung Analysis Platform, a cloud-based quantitative computed tomography analysis service that offers information on emphysema destruction, fissure completeness, and lobar volume to help identify target lobes for the treatment with Zephyr Valves. It serves emphysema patients in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company was formerly known as Pulmonx and changed its name to Pulmonx Corporation in December 2013. Pulmonx Corporation was incorporated in 1995 and is headquartered in Redwood City, California.
LUNG (Pulmonx Corporation) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $56.2M, a beta of 0.18 versus the broader market, a 52-week range of 1.13-3.88, average daily share volume of 559K, a public-listing history dating back to 2020, approximately 291 full-time employees. These structural characteristics shape how LUNG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.18 indicates LUNG 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 LUNG?
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 LUNG snapshot
As of May 15, 2026, spot at $1.27, ATM IV 27.00%, IV rank 1.51%, expected move 7.74%. The butterfly on LUNG 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 LUNG specifically: LUNG IV at 27.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a LUNG butterfly, with a market-implied 1-standard-deviation move of approximately 7.74% (roughly $0.10 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 LUNG expiries trade a higher absolute premium for lower per-day decay. Position sizing on LUNG should anchor to the underlying notional of $1.27 per share and to the trader's directional view on LUNG stock.
LUNG butterfly setup
The LUNG 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 LUNG near $1.27, the first option leg uses a $1.21 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LUNG 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 LUNG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.21 | N/A |
| Sell 2 | Call | $1.27 | N/A |
| Buy 1 | Call | $1.33 | N/A |
LUNG 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.
LUNG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on LUNG. 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 LUNG
Butterflies on LUNG are pinning bets - traders use them when they expect LUNG 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.
LUNG thesis for this butterfly
The market-implied 1-standard-deviation range for LUNG extends from approximately $1.17 on the downside to $1.37 on the upside. A LUNG long call butterfly is a pinning play: it pays maximum at the middle strike if LUNG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LUNG IV rank near 1.51% 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 LUNG at 27.00%. As a Healthcare name, LUNG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LUNG-specific events.
LUNG 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. LUNG positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LUNG alongside the broader basket even when LUNG-specific fundamentals are unchanged. Always rebuild the position from current LUNG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on LUNG?
- A butterfly on LUNG is the butterfly strategy applied to LUNG (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 LUNG stock trading near $1.27, the strikes shown on this page are snapped to the nearest listed LUNG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LUNG 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 LUNG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.00%), 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 LUNG butterfly?
- The breakeven for the LUNG 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 LUNG market-implied 1-standard-deviation expected move is approximately 7.74%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on LUNG?
- Butterflies on LUNG are pinning bets - traders use them when they expect LUNG 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 LUNG implied volatility affect this butterfly?
- LUNG ATM IV is at 27.00% with IV rank near 1.51%, 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.