LUNG Butterfly Strategy
LUNG (Pulmonx Corporation), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Pulmonx Corporation is a biomedical technology firm dedicated to developing and commercializing advanced, less invasive devices for managing chronic obstructive pulmonary diseases. Its primary offering, the Zephyr Endobronchial Valve, is specifically engineered to treat bronchoscopic hyperinflation in adults afflicted with severe emphysema. Complementing its therapeutic solutions, the company also provides the Chartis Pulmonary Assessment System. This system features a specialized balloon catheter and console, fitted with flow and pressure sensors, which is instrumental in evaluating the presence of collateral ventilation in patients. Additionally, Pulmonx offers the StratX Lung Analysis Platform, a cloud-based service that conducts quantitative computed tomography (CT) analysis. This platform delivers vital data concerning emphysema destruction, fissure completeness, and lobar volume, thereby aiding clinicians in accurately identifying the most suitable target lobes for treatment with Zephyr Valves.
LUNG (Pulmonx Corporation) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $102.2M, a beta of 0.28 versus the broader market, a 52-week range of 1.13-2.89, average daily share volume of 548K, a public-listing history dating back to 2020, approximately 296 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 0.28 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.
LUNG snapshot
As of August 14, 2026, spot at $2.40, ATM IV 144.70%, IV rank 32.85%, expected move 41.48%. The butterfly on LUNG below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on LUNG specifically: LUNG IV at 144.70% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 41.48% (roughly $1.00 on the underlying). The 35-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 $2.40 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 at $2.40 on that close, the first option leg uses a $2.28 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 35-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 | $2.28 | N/A |
| Sell 2 | Call | $2.40 | N/A |
| Buy 1 | Call | $2.52 | 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 $1.40 on the downside to $3.40 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 32.85% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on LUNG should anchor more to the directional view and the expected-move geometry. 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 at $2.40 on the most recent close, the strikes shown on this page are snapped to the nearest listed LUNG chain strike and the premiums come straight from that session's 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 144.70%), 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 the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The LUNG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 41.48%; 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 144.70% with IV rank near 32.85%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.