NTB Butterfly Strategy
NTB (The Bank of N.T. Butterfield & Son Limited), in the Financial Services sector, (Banks - Diversified industry), listed on NYSE.
The Bank of N.T. Butterfield & Son Limited provides a range of community, commercial, and private banking services to individuals and small to medium-sized businesses. It accepts retail and corporate checking, savings, term, and interest bearing and non-interest bearing deposits, as well as certificate of deposits. The company's lending portfolio includes residential mortgage lending, automobile lending, consumer financing, credit cards, overdraft facilities, commercial real estate lending, and commercial and industrial loans. It also offers investment products and services; and cash and liquidity management, foreign exchange, custody administration, and settlement services. In addition, the company provides personal and property/auto insurance products; letters of credit; and cash management, payroll, remote banking, money market, advisory, brokerage, trust, estate, company management, and fiduciary services.
NTB (The Bank of N.T. Butterfield & Son Limited) trades in the Financial Services sector, specifically Banks - Diversified, with a market capitalization of approximately $2.18B, a trailing P/E of 9.03, a beta of 0.50 versus the broader market, a 52-week range of 40.59-57.84, average daily share volume of 165K, a public-listing history dating back to 2016, approximately 1K full-time employees. These structural characteristics shape how NTB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.50 indicates NTB 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 9.03 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. NTB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NTB?
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 NTB snapshot
As of May 15, 2026, spot at $54.67, ATM IV 51.20%, IV rank 7.53%, expected move 14.68%. The butterfly on NTB 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 NTB specifically: NTB IV at 51.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a NTB butterfly, with a market-implied 1-standard-deviation move of approximately 14.68% (roughly $8.02 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 NTB expiries trade a higher absolute premium for lower per-day decay. Position sizing on NTB should anchor to the underlying notional of $54.67 per share and to the trader's directional view on NTB stock.
NTB butterfly setup
The NTB 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 NTB near $54.67, the first option leg uses a $51.94 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NTB 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 NTB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $51.94 | N/A |
| Sell 2 | Call | $54.67 | N/A |
| Buy 1 | Call | $57.40 | N/A |
NTB 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.
NTB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NTB. 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 NTB
Butterflies on NTB are pinning bets - traders use them when they expect NTB 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.
NTB thesis for this butterfly
The market-implied 1-standard-deviation range for NTB extends from approximately $46.65 on the downside to $62.69 on the upside. A NTB long call butterfly is a pinning play: it pays maximum at the middle strike if NTB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NTB IV rank near 7.53% 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 NTB at 51.20%. As a Financial Services name, NTB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NTB-specific events.
NTB 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. NTB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NTB alongside the broader basket even when NTB-specific fundamentals are unchanged. Always rebuild the position from current NTB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NTB?
- A butterfly on NTB is the butterfly strategy applied to NTB (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 NTB stock trading near $54.67, the strikes shown on this page are snapped to the nearest listed NTB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NTB 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 NTB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 51.20%), 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 NTB butterfly?
- The breakeven for the NTB 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 NTB market-implied 1-standard-deviation expected move is approximately 14.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NTB?
- Butterflies on NTB are pinning bets - traders use them when they expect NTB 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 NTB implied volatility affect this butterfly?
- NTB ATM IV is at 51.20% with IV rank near 7.53%, 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.