MGRC Butterfly Strategy
MGRC (McGrath RentCorp), in the Industrials sector, (Rental & Leasing Services industry), listed on NASDAQ.
McGrath RentCorp operates as a business to business rental company in the United States and internationally. It rents and sells relocatable modular buildings, portable storage containers, electronic test equipment and related accessories, and liquid and solid containment tanks and boxes. The company operates through four segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes; and portable storage containers. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. It also provides communications test equipment, including network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers.
MGRC (McGrath RentCorp) trades in the Industrials sector, specifically Rental & Leasing Services, with a market capitalization of approximately $2.80B, a trailing P/E of 18.12, a beta of 0.45 versus the broader market, a 52-week range of 94.99-128.41, average daily share volume of 213K, a public-listing history dating back to 1984, approximately 1K full-time employees. These structural characteristics shape how MGRC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.45 indicates MGRC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MGRC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on MGRC?
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 MGRC snapshot
As of May 15, 2026, spot at $112.23, ATM IV 20.70%, IV rank 1.81%, expected move 5.93%. The butterfly on MGRC 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 MGRC specifically: MGRC IV at 20.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a MGRC butterfly, with a market-implied 1-standard-deviation move of approximately 5.93% (roughly $6.66 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 MGRC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MGRC should anchor to the underlying notional of $112.23 per share and to the trader's directional view on MGRC stock.
MGRC butterfly setup
The MGRC 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 MGRC near $112.23, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MGRC 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 MGRC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $105.00 | $10.05 |
| Sell 2 | Call | $110.00 | $2.45 |
| Buy 1 | Call | $120.00 | $0.15 |
MGRC butterfly risk and reward
- Net Premium / Debit
- -$530.00
- Max Profit (per contract)
- -$84.32
- Max Loss (per contract)
- -$1,030.00
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- -0.082
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.
MGRC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MGRC. 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% | -$530.00 |
| $24.82 | -77.9% | -$530.00 |
| $49.64 | -55.8% | -$530.00 |
| $74.45 | -33.7% | -$530.00 |
| $99.26 | -11.6% | -$530.00 |
| $124.08 | +10.6% | -$1,030.00 |
| $148.89 | +32.7% | -$1,030.00 |
| $173.70 | +54.8% | -$1,030.00 |
| $198.52 | +76.9% | -$1,030.00 |
| $223.33 | +99.0% | -$1,030.00 |
When traders use butterfly on MGRC
Butterflies on MGRC are pinning bets - traders use them when they expect MGRC 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.
MGRC thesis for this butterfly
The market-implied 1-standard-deviation range for MGRC extends from approximately $105.57 on the downside to $118.89 on the upside. A MGRC long call butterfly is a pinning play: it pays maximum at the middle strike if MGRC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MGRC IV rank near 1.81% 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 MGRC at 20.70%. As a Industrials name, MGRC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MGRC-specific events.
MGRC 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. MGRC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MGRC alongside the broader basket even when MGRC-specific fundamentals are unchanged. Always rebuild the position from current MGRC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MGRC?
- A butterfly on MGRC is the butterfly strategy applied to MGRC (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 MGRC stock trading near $112.23, the strikes shown on this page are snapped to the nearest listed MGRC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MGRC 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 MGRC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 20.70%), the computed maximum profit is -$84.32 per contract and the computed maximum loss is -$1,030.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MGRC butterfly?
- The breakeven for the MGRC 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 MGRC market-implied 1-standard-deviation expected move is approximately 5.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MGRC?
- Butterflies on MGRC are pinning bets - traders use them when they expect MGRC 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 MGRC implied volatility affect this butterfly?
- MGRC ATM IV is at 20.70% with IV rank near 1.81%, 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.