NP Butterfly Strategy
NP (Neptune Insurance Holdings Inc.), in the Financial Services sector, (Insurance - Brokers industry), listed on NYSE.
Neptune Insurance Holdings Inc. functions as a technology-driven managing general agent (MGA) specializing in flood insurance solutions. The company provides a range of offerings, including both primary and excess flood coverage for residential and commercial properties, as well as parametric earthquake policies. At its core, Neptune leverages advanced artificial intelligence and machine learning platforms, notably their "Triton" system for underwriting and "Poseidon" for policy management. Distribution of these products occurs through an extensive agency network. Importantly, Neptune does not assume underwriting risk or manage claims directly; these functions are instead handled by their partnering insurance and reinsurance carriers.
NP (Neptune Insurance Holdings Inc.) trades in the Financial Services sector, specifically Insurance - Brokers, with a market capitalization of approximately $2.89B, a trailing P/E of 108.73, a beta of -0.20 versus the broader market, a 52-week range of 14.78-35.15, average daily share volume of 771K, a public-listing history dating back to 2025, approximately 62 full-time employees. These structural characteristics shape how NP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.20 indicates NP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 108.73 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. NP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NP?
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.
NP snapshot
As of August 14, 2026, spot at $32.06, ATM IV 73.60%, IV rank 25.20%, expected move 21.10%. The butterfly on NP below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on NP specifically: NP IV at 73.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a NP butterfly, with a market-implied 1-standard-deviation move of approximately 21.10% (roughly $6.76 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NP expiries trade a higher absolute premium for lower per-day decay. Position sizing on NP should anchor to the underlying notional of $32.06 per share and to the trader's directional view on NP stock.
NP butterfly setup
The NP 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 NP at $32.06 on that close, the first option leg uses a $30.46 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NP chain at a 35-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 NP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $30.46 | N/A |
| Sell 2 | Call | $32.06 | N/A |
| Buy 1 | Call | $33.66 | N/A |
NP 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.
NP butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NP. 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 NP
Butterflies on NP are pinning bets - traders use them when they expect NP 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.
NP thesis for this butterfly
The market-implied 1-standard-deviation range for NP extends from approximately $25.30 on the downside to $38.82 on the upside. A NP long call butterfly is a pinning play: it pays maximum at the middle strike if NP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NP IV rank near 25.20% 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 NP at 73.60%. As a Financial Services name, NP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NP-specific events.
NP 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. NP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NP alongside the broader basket even when NP-specific fundamentals are unchanged. Always rebuild the position from current NP chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NP?
- A butterfly on NP is the butterfly strategy applied to NP (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 NP stock at $32.06 on the most recent close, the strikes shown on this page are snapped to the nearest listed NP chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are NP 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 NP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 73.60%), 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 NP butterfly?
- The breakeven for the NP butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 NP market-implied 1-standard-deviation expected move in the same options snapshot is approximately 21.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NP?
- Butterflies on NP are pinning bets - traders use them when they expect NP 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 NP implied volatility affect this butterfly?
- NP ATM IV is at 73.60% with IV rank near 25.20%, 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.