MITT Butterfly Strategy
MITT (TPG Mortgage Investment Trust Inc), in the Real Estate sector, (REIT - Mortgage industry), listed on NYSE.
TPG Mortgage Investment Trust Inc operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio comprises residential investments, including non-qualifying mortgages loans, government-sponsored entity non-owner occupied loans, re/non-performing loans, land related financing, and agency residential mortgage-backed securities; and commercial investments. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2011 and is based in New York, New York.
MITT (TPG Mortgage Investment Trust Inc) trades in the Real Estate sector, specifically REIT - Mortgage, with a market capitalization of approximately $245.2M, a trailing P/E of 7.28, a beta of 1.71 versus the broader market, a 52-week range of 6.81-9.27, average daily share volume of 289K, a public-listing history dating back to 2011. These structural characteristics shape how MITT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.71 indicates MITT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 7.28 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. MITT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on MITT?
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 MITT snapshot
As of May 15, 2026, spot at $7.49, ATM IV 30.10%, IV rank 5.96%, expected move 8.63%. The butterfly on MITT 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 MITT specifically: MITT IV at 30.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a MITT butterfly, with a market-implied 1-standard-deviation move of approximately 8.63% (roughly $0.65 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 MITT expiries trade a higher absolute premium for lower per-day decay. Position sizing on MITT should anchor to the underlying notional of $7.49 per share and to the trader's directional view on MITT stock.
MITT butterfly setup
The MITT 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 MITT near $7.49, the first option leg uses a $7.12 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MITT 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 MITT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $7.12 | N/A |
| Sell 2 | Call | $7.49 | N/A |
| Buy 1 | Call | $7.86 | N/A |
MITT 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.
MITT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MITT. 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 MITT
Butterflies on MITT are pinning bets - traders use them when they expect MITT 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.
MITT thesis for this butterfly
The market-implied 1-standard-deviation range for MITT extends from approximately $6.84 on the downside to $8.14 on the upside. A MITT long call butterfly is a pinning play: it pays maximum at the middle strike if MITT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MITT IV rank near 5.96% 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 MITT at 30.10%. As a Real Estate name, MITT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MITT-specific events.
MITT 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. MITT positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MITT alongside the broader basket even when MITT-specific fundamentals are unchanged. Always rebuild the position from current MITT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MITT?
- A butterfly on MITT is the butterfly strategy applied to MITT (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 MITT stock trading near $7.49, the strikes shown on this page are snapped to the nearest listed MITT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MITT 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 MITT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 30.10%), 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 MITT butterfly?
- The breakeven for the MITT 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 MITT market-implied 1-standard-deviation expected move is approximately 8.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MITT?
- Butterflies on MITT are pinning bets - traders use them when they expect MITT 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 MITT implied volatility affect this butterfly?
- MITT ATM IV is at 30.10% with IV rank near 5.96%, 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.