NDLS Butterfly Strategy
NDLS (Noodles & Company), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.
Noodles & Company, a restaurant concept company, develops and operates fast-casual restaurants. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. As of December 28, 2021, the company operated 448 restaurants in 29 states, which included 372 company locations and 76 franchise locations. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.
NDLS (Noodles & Company) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $75.0M, a beta of 1.44 versus the broader market, a 52-week range of 3.57-13.95, average daily share volume of 96K, a public-listing history dating back to 2013, approximately 7K full-time employees. These structural characteristics shape how NDLS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.44 indicates NDLS 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 NDLS?
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 NDLS snapshot
As of May 15, 2026, spot at $12.25, ATM IV 43.80%, IV rank 3.18%, expected move 12.56%. The butterfly on NDLS 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 98-day expiry.
Why this butterfly structure on NDLS specifically: NDLS IV at 43.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a NDLS butterfly, with a market-implied 1-standard-deviation move of approximately 12.56% (roughly $1.54 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NDLS expiries trade a higher absolute premium for lower per-day decay. Position sizing on NDLS should anchor to the underlying notional of $12.25 per share and to the trader's directional view on NDLS stock.
NDLS butterfly setup
The NDLS 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 NDLS near $12.25, the first option leg uses a $11.64 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NDLS chain at a 98-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 NDLS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $11.64 | N/A |
| Sell 2 | Call | $12.25 | N/A |
| Buy 1 | Call | $12.86 | N/A |
NDLS 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.
NDLS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NDLS. 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 NDLS
Butterflies on NDLS are pinning bets - traders use them when they expect NDLS 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.
NDLS thesis for this butterfly
The market-implied 1-standard-deviation range for NDLS extends from approximately $10.71 on the downside to $13.79 on the upside. A NDLS long call butterfly is a pinning play: it pays maximum at the middle strike if NDLS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NDLS IV rank near 3.18% 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 NDLS at 43.80%. As a Consumer Cyclical name, NDLS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NDLS-specific events.
NDLS 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. NDLS positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NDLS alongside the broader basket even when NDLS-specific fundamentals are unchanged. Always rebuild the position from current NDLS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NDLS?
- A butterfly on NDLS is the butterfly strategy applied to NDLS (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 NDLS stock trading near $12.25, the strikes shown on this page are snapped to the nearest listed NDLS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NDLS 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 NDLS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 43.80%), 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 NDLS butterfly?
- The breakeven for the NDLS 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 NDLS market-implied 1-standard-deviation expected move is approximately 12.56%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NDLS?
- Butterflies on NDLS are pinning bets - traders use them when they expect NDLS 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 NDLS implied volatility affect this butterfly?
- NDLS ATM IV is at 43.80% with IV rank near 3.18%, 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.