MRDN Butterfly Strategy
MRDN (Meridian Holdings Inc.), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NASDAQ.
Meridian Holdings Inc. specializes in providing a diverse array of offerings within the casino, sportsbook, and competitive gaming industries. The company operates under several key brands, including R Kings Competitions, MexPlay, and GM-AG. Its operational structure is divided into two distinct divisions: Business-to-Business (B2B) and Business-to-Consumer (B2C). Through its B2B segment, Meridian generates income from software licensing fees and collects royalties derived from the utilization of third-party gaming content. Meanwhile, the B2C division primarily earns revenue by charging participants for entry into various prize competitions across the United Kingdom. This enterprise was established on June 4, 2008, by co-founders Weiting Feng and Anthony Brian Goodman, and its corporate headquarters are located in Las Vegas, Nevada.
MRDN (Meridian Holdings Inc.) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $180.6M, a beta of 1.44 versus the broader market, a 52-week range of 5.796-18.84, average daily share volume of 66K, a public-listing history dating back to 2009, approximately 1K full-time employees. These structural characteristics shape how MRDN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.44 indicates MRDN 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 MRDN?
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.
MRDN snapshot
As of August 14, 2026, spot at $14.27, ATM IV 116.80%, expected move 33.49%. The butterfly on MRDN 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 MRDN specifically: IV rank is unavailable in the current snapshot, so regime-based timing for MRDN is inferred from ATM IV at 116.80% alone, with a market-implied 1-standard-deviation move of approximately 33.49% (roughly $4.78 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 MRDN expiries trade a higher absolute premium for lower per-day decay. Position sizing on MRDN should anchor to the underlying notional of $14.27 per share and to the trader's directional view on MRDN stock.
MRDN butterfly setup
The MRDN 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 MRDN at $14.27 on that close, the first option leg uses a $13.56 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MRDN 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 MRDN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $13.56 | N/A |
| Sell 2 | Call | $14.27 | N/A |
| Buy 1 | Call | $14.98 | N/A |
MRDN 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.
MRDN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on MRDN. 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 MRDN
Butterflies on MRDN are pinning bets - traders use them when they expect MRDN 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.
MRDN thesis for this butterfly
The market-implied 1-standard-deviation range for MRDN extends from approximately $9.49 on the downside to $19.05 on the upside. A MRDN long call butterfly is a pinning play: it pays maximum at the middle strike if MRDN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. As a Consumer Cyclical name, MRDN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MRDN-specific events.
MRDN 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. MRDN positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MRDN alongside the broader basket even when MRDN-specific fundamentals are unchanged. Always rebuild the position from current MRDN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on MRDN?
- A butterfly on MRDN is the butterfly strategy applied to MRDN (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 MRDN stock at $14.27 on the most recent close, the strikes shown on this page are snapped to the nearest listed MRDN chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are MRDN 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 MRDN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 116.80%), 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 MRDN butterfly?
- The breakeven for the MRDN 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 MRDN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 33.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on MRDN?
- Butterflies on MRDN are pinning bets - traders use them when they expect MRDN 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 MRDN implied volatility affect this butterfly?
- Current MRDN ATM IV is 116.80%; IV rank context is unavailable in the current snapshot.