NVMI Butterfly Strategy
NVMI (Nova Ltd.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Nova Ltd. is a global innovator specializing in the design, development, production, and sale of sophisticated process control systems vital for semiconductor manufacturing. Its extensive reach covers key regions such as Israel, Taiwan, the United States, China, and Korea, in addition to other international markets. The company's advanced product range includes a suite of metrology platforms, enabling precise measurements of dimensions, films, materials, and chemical compositions. These capabilities are crucial for ensuring meticulous process control throughout various stages of semiconductor fabrication, including lithography, etching, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. Nova serves diverse segments of the integrated circuit manufacturing industry, providing solutions to leading logic, foundry, and memory producers, as well as manufacturers of process equipment. Headquartered in Rehovot, Israel, and established in 1993, the company changed its name to Nova Ltd. in July 2021, having previously been known as Nova Measuring Instruments Ltd.
NVMI (Nova Ltd.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $15.53B, a trailing P/E of 61.61, a beta of 1.75 versus the broader market, a 52-week range of 232.73-615.99, average daily share volume of 410K, a public-listing history dating back to 2000, approximately 1K full-time employees. These structural characteristics shape how NVMI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.75 indicates NVMI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 61.61 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.
What is a butterfly on NVMI?
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 NVMI snapshot
As of June 29, 2026, spot at $520.16, ATM IV 66.10%, IV rank 30.81%, expected move 18.95%. The butterfly on NVMI 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 NVMI specifically: NVMI IV at 66.10% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 18.95% (roughly $98.57 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 NVMI expiries trade a higher absolute premium for lower per-day decay. Position sizing on NVMI should anchor to the underlying notional of $520.16 per share and to the trader's directional view on NVMI stock.
NVMI butterfly setup
The NVMI 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 NVMI near $520.16, the first option leg uses a $490.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NVMI 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 NVMI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $490.00 | $47.00 |
| Sell 2 | Call | $520.00 | $30.25 |
| Buy 1 | Call | $550.00 | $19.30 |
NVMI butterfly risk and reward
- Net Premium / Debit
- -$580.00
- Max Profit (per contract)
- $2,175.12
- Max Loss (per contract)
- -$580.00
- Breakeven(s)
- $495.80, $544.20
- Risk / Reward Ratio
- 3.750
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.
NVMI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NVMI. 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% | -$580.00 |
| $115.02 | -77.9% | -$580.00 |
| $230.03 | -55.8% | -$580.00 |
| $345.04 | -33.7% | -$580.00 |
| $460.05 | -11.6% | -$580.00 |
| $575.06 | +10.6% | -$580.00 |
| $690.06 | +32.7% | -$580.00 |
| $805.07 | +54.8% | -$580.00 |
| $920.08 | +76.9% | -$580.00 |
| $1,035.09 | +99.0% | -$580.00 |
When traders use butterfly on NVMI
Butterflies on NVMI are pinning bets - traders use them when they expect NVMI 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.
NVMI thesis for this butterfly
The market-implied 1-standard-deviation range for NVMI extends from approximately $421.59 on the downside to $618.73 on the upside. A NVMI long call butterfly is a pinning play: it pays maximum at the middle strike if NVMI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NVMI IV rank near 30.81% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on NVMI should anchor more to the directional view and the expected-move geometry. As a Technology name, NVMI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NVMI-specific events.
NVMI 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. NVMI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NVMI alongside the broader basket even when NVMI-specific fundamentals are unchanged. Always rebuild the position from current NVMI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NVMI?
- A butterfly on NVMI is the butterfly strategy applied to NVMI (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 NVMI stock trading near $520.16, the strikes shown on this page are snapped to the nearest listed NVMI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NVMI 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 NVMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 66.10%), the computed maximum profit is $2,175.12 per contract and the computed maximum loss is -$580.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NVMI butterfly?
- The breakeven for the NVMI butterfly priced on this page is roughly $495.80 and $544.20 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 NVMI market-implied 1-standard-deviation expected move is approximately 18.95%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NVMI?
- Butterflies on NVMI are pinning bets - traders use them when they expect NVMI 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 NVMI implied volatility affect this butterfly?
- NVMI ATM IV is at 66.10% with IV rank near 30.81%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.