How are NRP 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 NRP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.70%), the computed maximum profit is $253.68 per contract and the computed maximum loss is -$215.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a NRP butterfly?

The breakeven for the NRP butterfly priced on this page is roughly $102.15 and $107.85 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 NRP market-implied 1-standard-deviation expected move is approximately 8.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current NRP implied volatility affect this butterfly?

NRP ATM IV is at 29.70% with IV rank near 8.31%, 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.

NRP Butterfly Strategy

NRP (Natural Resource Partners L.P.), in the Energy sector, (Coal industry), listed on NYSE.

Natural Resource Partners L.P., through its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States. It operates through two segments, Mineral Rights and Soda Ash. The company owns interests in coal, soda ash, trona, and other natural resources. Its coal reserves are primarily located in Appalachia, the Illinois Basin, and the Northern Powder River Basin in the United States; industrial minerals and aggregates properties are located in the United States; oil and gas properties located in Louisiana; timber assets located in West Virginia; and trona ore mining operation and soda ash refinery are located in the Green River Basin, Wyoming. The company leases a portion of its reserves in exchange for royalty payments; and owns and leases transportation and processing infrastructure related to coal properties. NRP (GP) LP serves as the general partner of the company.

NRP (Natural Resource Partners L.P.) trades in the Energy sector, specifically Coal, with a market capitalization of approximately $1.42B, a trailing P/E of 12.47, a beta of 0.18 versus the broader market, a 52-week range of 91.79-128.6, average daily share volume of 40K, a public-listing history dating back to 2002, approximately 56 full-time employees. These structural characteristics shape how NRP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.18 indicates NRP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NRP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on NRP?

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 NRP snapshot

As of May 15, 2026, spot at $106.92, ATM IV 29.70%, IV rank 8.31%, expected move 8.51%. The butterfly on NRP 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 NRP specifically: NRP IV at 29.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a NRP butterfly, with a market-implied 1-standard-deviation move of approximately 8.51% (roughly $9.10 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 NRP expiries trade a higher absolute premium for lower per-day decay. Position sizing on NRP should anchor to the underlying notional of $106.92 per share and to the trader's directional view on NRP stock.

NRP butterfly setup

The NRP 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 NRP near $106.92, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NRP 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 NRP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$100.00	$8.25
Sell 2	Call	$105.00	$4.45
Buy 1	Call	$110.00	$2.80

NRP butterfly risk and reward

Net Premium / Debit: -$215.00
Max Profit (per contract): $253.68
Max Loss (per contract): -$215.00
Breakeven(s): $102.15, $107.85
Risk / Reward Ratio: 1.180

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.

NRP butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on NRP. 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%	-$215.00
$23.65	-77.9%	-$215.00
$47.29	-55.8%	-$215.00
$70.93	-33.7%	-$215.00
$94.57	-11.6%	-$215.00
$118.21	+10.6%	-$215.00
$141.85	+32.7%	-$215.00
$165.49	+54.8%	-$215.00
$189.13	+76.9%	-$215.00
$212.77	+99.0%	-$215.00

When traders use butterfly on NRP

Butterflies on NRP are pinning bets - traders use them when they expect NRP 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.

NRP thesis for this butterfly

The market-implied 1-standard-deviation range for NRP extends from approximately $97.82 on the downside to $116.02 on the upside. A NRP long call butterfly is a pinning play: it pays maximum at the middle strike if NRP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NRP IV rank near 8.31% 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 NRP at 29.70%. As a Energy name, NRP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NRP-specific events.

NRP 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. NRP positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NRP alongside the broader basket even when NRP-specific fundamentals are unchanged. Always rebuild the position from current NRP chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on NRP?: A butterfly on NRP is the butterfly strategy applied to NRP (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 NRP stock trading near $106.92, the strikes shown on this page are snapped to the nearest listed NRP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are NRP 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 NRP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.70%), the computed maximum profit is $253.68 per contract and the computed maximum loss is -$215.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a NRP butterfly?: The breakeven for the NRP butterfly priced on this page is roughly $102.15 and $107.85 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 NRP market-implied 1-standard-deviation expected move is approximately 8.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on NRP?: Butterflies on NRP are pinning bets - traders use them when they expect NRP 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 NRP implied volatility affect this butterfly?: NRP ATM IV is at 29.70% with IV rank near 8.31%, 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.