NHC Butterfly Strategy
NHC (National HealthCare Corporation), in the Healthcare sector, (Medical - Care Facilities industry), listed on AMEX.
National HealthCare Corporation (NHC) is a prominent provider in the healthcare sector, involved in the operation, management, and service provision for a wide array of elder care and health facilities. Its diverse portfolio includes skilled nursing facilities, assisted living communities, independent living residences, homecare and hospice agencies, and a specialized behavioral health hospital. Within its skilled nursing environments, NHC offers extensive therapeutic and medical care. Patients recovering from conditions such as strokes, heart attacks, orthopedic injuries, neurological ailments, or other illnesses and disabilities benefit from licensed physical, speech, respiratory, and occupational therapies. These facilities also provide essential services like nutritional guidance, social support, recreational activities, and daily necessities such as housekeeping and laundry, all complemented by physician-prescribed medical treatments. Distinctive medical specialty units further enhance care, featuring memory care for individuals with Alzheimer's and similar disorders, alongside sub-acute nursing units.
NHC (National HealthCare Corporation) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $3.46B, a trailing P/E of 24.68, a beta of 0.64 versus the broader market, a 52-week range of 105.22-232.67, average daily share volume of 126K, a public-listing history dating back to 1987, approximately 15K full-time employees. These structural characteristics shape how NHC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.64 indicates NHC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NHC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NHC?
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.
NHC snapshot
As of August 14, 2026, spot at $224.91, ATM IV 34.00%, IV rank 3.11%, expected move 9.75%. The butterfly on NHC below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 7-day expiry.
Why this butterfly structure on NHC specifically: NHC IV at 34.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a NHC butterfly, with a market-implied 1-standard-deviation move of approximately 9.75% (roughly $21.92 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NHC expiries trade a higher absolute premium for lower per-day decay. Position sizing on NHC should anchor to the underlying notional of $224.91 per share and to the trader's directional view on NHC stock.
NHC butterfly setup
The NHC butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With NHC at $224.91 on that close, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NHC chain at a 7-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 NHC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $210.00 | $16.50 |
| Sell 2 | Call | $220.00 | $8.55 |
| Buy 1 | Call | $240.00 | $0.93 |
NHC butterfly risk and reward
- Net Premium / Debit
- -$33.00
- Max Profit (per contract)
- $893.41
- Max Loss (per contract)
- -$1,033.00
- Breakeven(s)
- $210.33, $229.67
- Risk / Reward Ratio
- 0.865
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.
NHC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NHC. 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% | -$33.00 |
| $49.74 | -77.9% | -$33.00 |
| $99.47 | -55.8% | -$33.00 |
| $149.19 | -33.7% | -$33.00 |
| $198.92 | -11.6% | -$33.00 |
| $248.65 | +10.6% | -$1,033.00 |
| $298.38 | +32.7% | -$1,033.00 |
| $348.10 | +54.8% | -$1,033.00 |
| $397.83 | +76.9% | -$1,033.00 |
| $447.56 | +99.0% | -$1,033.00 |
When traders use butterfly on NHC
Butterflies on NHC are pinning bets - traders use them when they expect NHC 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.
NHC thesis for this butterfly
The market-implied 1-standard-deviation range for NHC extends from approximately $202.99 on the downside to $246.83 on the upside. A NHC long call butterfly is a pinning play: it pays maximum at the middle strike if NHC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NHC IV rank near 3.11% 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 NHC at 34.00%. As a Healthcare name, NHC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NHC-specific events.
NHC 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. NHC positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NHC alongside the broader basket even when NHC-specific fundamentals are unchanged. Always rebuild the position from current NHC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NHC?
- A butterfly on NHC is the butterfly strategy applied to NHC (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 NHC stock at $224.91 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed NHC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are NHC 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 NHC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.00%), the computed maximum profit is $893.41 per contract and the computed maximum loss is -$1,033.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NHC butterfly?
- The breakeven for the NHC butterfly priced on this page is roughly $210.33 and $229.67 at expiration, derived from the August 14, 2026 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 NHC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.75%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NHC?
- Butterflies on NHC are pinning bets - traders use them when they expect NHC 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 NHC implied volatility affect this butterfly?
- NHC ATM IV is at 34.00% with IV rank near 3.11%, 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.