NRT Butterfly Strategy
NRT (North European Oil Royalty Trust), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.
North European Oil Royalty Trust, a grantor trust, holds overriding royalty rights covering gas and oil production in various concessions or leases in the Federal Republic of Germany. The company has rights under contracts with German exploration and development subsidiaries of ExxonMobil Corp. and the Royal Dutch/Shell Group of Companies. It holds royalties for the sale of gas well gas, oil well gas, crude oil, condensate, and sulfur. North European Oil Royalty Trust is based in Keene, New Hampshire.
NRT (North European Oil Royalty Trust) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $71.7M, a trailing P/E of 7.47, a beta of -0.03 versus the broader market, a 52-week range of 4.36-10.49, average daily share volume of 96K, a public-listing history dating back to 1980, approximately 2 full-time employees. These structural characteristics shape how NRT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.03 indicates NRT 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 7.47 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. NRT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NRT?
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 NRT snapshot
As of May 15, 2026, spot at $8.13, ATM IV 94.30%, IV rank 27.69%, expected move 27.03%. The butterfly on NRT 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 NRT specifically: NRT IV at 94.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a NRT butterfly, with a market-implied 1-standard-deviation move of approximately 27.03% (roughly $2.20 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 NRT expiries trade a higher absolute premium for lower per-day decay. Position sizing on NRT should anchor to the underlying notional of $8.13 per share and to the trader's directional view on NRT stock.
NRT butterfly setup
The NRT 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 NRT near $8.13, the first option leg uses a $7.72 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NRT 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 NRT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $7.72 | N/A |
| Sell 2 | Call | $8.13 | N/A |
| Buy 1 | Call | $8.54 | N/A |
NRT 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.
NRT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NRT. 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 NRT
Butterflies on NRT are pinning bets - traders use them when they expect NRT 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.
NRT thesis for this butterfly
The market-implied 1-standard-deviation range for NRT extends from approximately $5.93 on the downside to $10.33 on the upside. A NRT long call butterfly is a pinning play: it pays maximum at the middle strike if NRT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NRT IV rank near 27.69% 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 NRT at 94.30%. As a Energy name, NRT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NRT-specific events.
NRT 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. NRT positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NRT alongside the broader basket even when NRT-specific fundamentals are unchanged. Always rebuild the position from current NRT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NRT?
- A butterfly on NRT is the butterfly strategy applied to NRT (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 NRT stock trading near $8.13, the strikes shown on this page are snapped to the nearest listed NRT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NRT 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 NRT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 94.30%), 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 NRT butterfly?
- The breakeven for the NRT 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 NRT market-implied 1-standard-deviation expected move is approximately 27.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NRT?
- Butterflies on NRT are pinning bets - traders use them when they expect NRT 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 NRT implied volatility affect this butterfly?
- NRT ATM IV is at 94.30% with IV rank near 27.69%, 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.