NE Butterfly Strategy
NE (Noble Corporation Plc), in the Energy sector, (Oil & Gas Drilling industry), listed on NYSE.
Noble Corporation, together with its subsidiaries, operates as an offshore drilling contractor for the oil and gas industry worldwide. The company provides contract drilling services to the oil and gas industry through its fleet of mobile offshore drilling units. As of February 16, 2022, it operated a fleet of 20 offshore drilling units, which included 12 floaters and 8 jackups. The company was formerly known as Noble Holding Corporation plc. Noble Corporation was founded in 1921 and is headquartered in Sugar Land, Texas.
NE (Noble Corporation Plc) trades in the Energy sector, specifically Oil & Gas Drilling, with a market capitalization of approximately $8.18B, a trailing P/E of 35.52, a beta of 0.95 versus the broader market, a 52-week range of 22.374-54.57, average daily share volume of 1.9M, a public-listing history dating back to 2021, approximately 5K full-time employees. These structural characteristics shape how NE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.95 places NE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 35.52 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. NE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NE?
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 NE snapshot
As of May 15, 2026, spot at $53.02, ATM IV 41.40%, IV rank 23.87%, expected move 11.87%. The butterfly on NE 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 NE specifically: NE IV at 41.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a NE butterfly, with a market-implied 1-standard-deviation move of approximately 11.87% (roughly $6.29 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 NE expiries trade a higher absolute premium for lower per-day decay. Position sizing on NE should anchor to the underlying notional of $53.02 per share and to the trader's directional view on NE stock.
NE butterfly setup
The NE 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 NE near $53.02, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NE 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 NE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $50.00 | $4.25 |
| Sell 2 | Call | $52.50 | $2.80 |
| Buy 1 | Call | $55.00 | $1.75 |
NE butterfly risk and reward
- Net Premium / Debit
- -$40.00
- Max Profit (per contract)
- $184.14
- Max Loss (per contract)
- -$40.00
- Breakeven(s)
- $50.40, $54.60
- Risk / Reward Ratio
- 4.604
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.
NE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NE. 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% | -$40.00 |
| $11.73 | -77.9% | -$40.00 |
| $23.45 | -55.8% | -$40.00 |
| $35.18 | -33.7% | -$40.00 |
| $46.90 | -11.5% | -$40.00 |
| $58.62 | +10.6% | -$40.00 |
| $70.34 | +32.7% | -$40.00 |
| $82.06 | +54.8% | -$40.00 |
| $93.79 | +76.9% | -$40.00 |
| $105.51 | +99.0% | -$40.00 |
When traders use butterfly on NE
Butterflies on NE are pinning bets - traders use them when they expect NE 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.
NE thesis for this butterfly
The market-implied 1-standard-deviation range for NE extends from approximately $46.73 on the downside to $59.31 on the upside. A NE long call butterfly is a pinning play: it pays maximum at the middle strike if NE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NE IV rank near 23.87% 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 NE at 41.40%. As a Energy name, NE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NE-specific events.
NE 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. NE positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NE alongside the broader basket even when NE-specific fundamentals are unchanged. Always rebuild the position from current NE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NE?
- A butterfly on NE is the butterfly strategy applied to NE (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 NE stock trading near $53.02, the strikes shown on this page are snapped to the nearest listed NE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NE 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 NE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 41.40%), the computed maximum profit is $184.14 per contract and the computed maximum loss is -$40.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NE butterfly?
- The breakeven for the NE butterfly priced on this page is roughly $50.40 and $54.60 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 NE market-implied 1-standard-deviation expected move is approximately 11.87%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NE?
- Butterflies on NE are pinning bets - traders use them when they expect NE 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 NE implied volatility affect this butterfly?
- NE ATM IV is at 41.40% with IV rank near 23.87%, 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.