NMG Butterfly Strategy
NMG (Nouveau Monde Graphite Inc.), in the Basic Materials sector, (Industrial Materials industry), listed on NYSE.
Nouveau Monde Graphite Inc. (NMG) is a Canadian enterprise primarily focused on the acquisition, investigation, growth, and assessment of mineral resources within Canada. The company's main exploratory efforts are directed towards unearthing graphite. A significant asset for the firm is its flagship Matawinie property, an expansive site encompassing 392 mining claims across 21,750 hectares, strategically located just north of Montreal, Quebec. Beyond its core mineral operations, the company also engages in real estate and commercial trading. Established in 2011, the organization operated under the name Nouveau Monde Mining Enterprises Inc. until February 2017, when it adopted its current designation. Its principal office is situated in Saint-Michel-des-Saints, Canada.
NMG (Nouveau Monde Graphite Inc.) trades in the Basic Materials sector, specifically Industrial Materials, with a market capitalization of approximately $231.8M, a beta of 0.85 versus the broader market, a 52-week range of 1.37-6.06, average daily share volume of 1.2M, a public-listing history dating back to 2021, approximately 113 full-time employees. These structural characteristics shape how NMG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.85 places NMG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on NMG?
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 NMG snapshot
As of June 29, 2026, spot at $1.50, ATM IV 21.70%, IV rank 2.65%, expected move 6.22%. The butterfly on NMG 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 18-day expiry.
Why this butterfly structure on NMG specifically: NMG IV at 21.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a NMG butterfly, with a market-implied 1-standard-deviation move of approximately 6.22% (roughly $0.09 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NMG expiries trade a higher absolute premium for lower per-day decay. Position sizing on NMG should anchor to the underlying notional of $1.50 per share and to the trader's directional view on NMG stock.
NMG butterfly setup
The NMG 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 NMG near $1.50, the first option leg uses a $1.42 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NMG chain at a 18-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 NMG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.42 | N/A |
| Sell 2 | Call | $1.50 | N/A |
| Buy 1 | Call | $1.58 | N/A |
NMG 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.
NMG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NMG. 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 NMG
Butterflies on NMG are pinning bets - traders use them when they expect NMG 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.
NMG thesis for this butterfly
The market-implied 1-standard-deviation range for NMG extends from approximately $1.41 on the downside to $1.59 on the upside. A NMG long call butterfly is a pinning play: it pays maximum at the middle strike if NMG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NMG IV rank near 2.65% 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 NMG at 21.70%. As a Basic Materials name, NMG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NMG-specific events.
NMG 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. NMG positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NMG alongside the broader basket even when NMG-specific fundamentals are unchanged. Always rebuild the position from current NMG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NMG?
- A butterfly on NMG is the butterfly strategy applied to NMG (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 NMG stock trading near $1.50, the strikes shown on this page are snapped to the nearest listed NMG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NMG 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 NMG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 21.70%), 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 NMG butterfly?
- The breakeven for the NMG 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 NMG market-implied 1-standard-deviation expected move is approximately 6.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NMG?
- Butterflies on NMG are pinning bets - traders use them when they expect NMG 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 NMG implied volatility affect this butterfly?
- NMG ATM IV is at 21.70% with IV rank near 2.65%, 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.