NFLX Butterfly Strategy
NFLX (Netflix, Inc.), in the Communication Services sector, (Entertainment industry), listed on NASDAQ.
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services in the United States. The company has approximately 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.
NFLX (Netflix, Inc.) trades in the Communication Services sector, specifically Entertainment, with a market capitalization of approximately $368.70B, a trailing P/E of 27.65, a beta of 1.55 versus the broader market, a 52-week range of 75.01-134.115, average daily share volume of 44.7M, a public-listing history dating back to 2002, approximately 14K full-time employees. These structural characteristics shape how NFLX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.55 indicates NFLX 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 NFLX?
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 NFLX snapshot
As of May 15, 2026, spot at $86.72, ATM IV 30.71%, IV rank 26.46%, expected move 8.81%. The butterfly on NFLX 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 28-day expiry.
Why this butterfly structure on NFLX specifically: NFLX IV at 30.71% is on the cheap side of its 1-year range, which favors premium-buying structures like a NFLX butterfly, with a market-implied 1-standard-deviation move of approximately 8.81% (roughly $7.64 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NFLX expiries trade a higher absolute premium for lower per-day decay. Position sizing on NFLX should anchor to the underlying notional of $86.72 per share and to the trader's directional view on NFLX stock.
NFLX butterfly setup
The NFLX 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 NFLX near $86.72, the first option leg uses a $82.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NFLX chain at a 28-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 NFLX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $82.00 | $6.23 |
| Sell 2 | Call | $87.00 | $3.01 |
| Buy 1 | Call | $91.00 | $1.44 |
NFLX butterfly risk and reward
- Net Premium / Debit
- -$165.50
- Max Profit (per contract)
- $318.42
- Max Loss (per contract)
- -$165.50
- Breakeven(s)
- $83.66, $90.35
- Risk / Reward Ratio
- 1.924
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.
NFLX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NFLX. 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% | -$165.50 |
| $19.18 | -77.9% | -$165.50 |
| $38.36 | -55.8% | -$165.50 |
| $57.53 | -33.7% | -$165.50 |
| $76.70 | -11.6% | -$165.50 |
| $95.88 | +10.6% | -$65.50 |
| $115.05 | +32.7% | -$65.50 |
| $134.22 | +54.8% | -$65.50 |
| $153.40 | +76.9% | -$65.50 |
| $172.57 | +99.0% | -$65.50 |
When traders use butterfly on NFLX
Butterflies on NFLX are pinning bets - traders use them when they expect NFLX 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.
NFLX thesis for this butterfly
The market-implied 1-standard-deviation range for NFLX extends from approximately $79.08 on the downside to $94.36 on the upside. A NFLX long call butterfly is a pinning play: it pays maximum at the middle strike if NFLX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NFLX IV rank near 26.46% 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 NFLX at 30.71%. As a Communication Services name, NFLX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NFLX-specific events.
NFLX 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. NFLX positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NFLX alongside the broader basket even when NFLX-specific fundamentals are unchanged. Always rebuild the position from current NFLX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NFLX?
- A butterfly on NFLX is the butterfly strategy applied to NFLX (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 NFLX stock trading near $86.72, the strikes shown on this page are snapped to the nearest listed NFLX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NFLX 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 NFLX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 30.71%), the computed maximum profit is $318.42 per contract and the computed maximum loss is -$165.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NFLX butterfly?
- The breakeven for the NFLX butterfly priced on this page is roughly $83.66 and $90.35 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 NFLX market-implied 1-standard-deviation expected move is approximately 8.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NFLX?
- Butterflies on NFLX are pinning bets - traders use them when they expect NFLX 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 NFLX implied volatility affect this butterfly?
- NFLX ATM IV is at 30.71% with IV rank near 26.46%, 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.