NXRT Butterfly Strategy
NXRT (NexPoint Residential Trust, Inc.), in the Real Estate sector, (REIT - Residential industry), listed on NYSE.
NexPoint Residential Trust (NXRT) is a Real Estate Investment Trust publicly traded on the New York Stock Exchange, specializing in the acquisition, ownership, and operation of well-located apartment communities designed for middle-income residents. The company seeks properties offering opportunities for value enhancement in major metropolitan areas and their surrounding suburbs, predominantly situated in the Southeastern and Southwestern United States. NXRT receives external advisory services from NexPoint Real Estate Advisors, L.P., an associate of NexPoint Advisors, L.P., an investment advisor registered with the SEC that possesses extensive experience in the real estate sector.
NXRT (NexPoint Residential Trust, Inc.) trades in the Real Estate sector, specifically REIT - Residential, with a market capitalization of approximately $726.6M, a beta of 1.20 versus the broader market, a 52-week range of 23.79-35.08, average daily share volume of 227K, a public-listing history dating back to 2015, approximately 2 full-time employees. These structural characteristics shape how NXRT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.20 places NXRT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. NXRT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on NXRT?
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 NXRT snapshot
As of June 29, 2026, spot at $28.34, ATM IV 67.70%, IV rank 18.53%, expected move 19.41%. The butterfly on NXRT 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 NXRT specifically: NXRT IV at 67.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a NXRT butterfly, with a market-implied 1-standard-deviation move of approximately 19.41% (roughly $5.50 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 NXRT expiries trade a higher absolute premium for lower per-day decay. Position sizing on NXRT should anchor to the underlying notional of $28.34 per share and to the trader's directional view on NXRT stock.
NXRT butterfly setup
The NXRT 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 NXRT near $28.34, the first option leg uses a $26.92 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NXRT 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 NXRT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $26.92 | N/A |
| Sell 2 | Call | $28.34 | N/A |
| Buy 1 | Call | $29.76 | N/A |
NXRT 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.
NXRT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on NXRT. 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 NXRT
Butterflies on NXRT are pinning bets - traders use them when they expect NXRT 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.
NXRT thesis for this butterfly
The market-implied 1-standard-deviation range for NXRT extends from approximately $22.84 on the downside to $33.84 on the upside. A NXRT long call butterfly is a pinning play: it pays maximum at the middle strike if NXRT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NXRT IV rank near 18.53% 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 NXRT at 67.70%. As a Real Estate name, NXRT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NXRT-specific events.
NXRT 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. NXRT positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NXRT alongside the broader basket even when NXRT-specific fundamentals are unchanged. Always rebuild the position from current NXRT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on NXRT?
- A butterfly on NXRT is the butterfly strategy applied to NXRT (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 NXRT stock trading near $28.34, the strikes shown on this page are snapped to the nearest listed NXRT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NXRT 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 NXRT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 67.70%), 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 NXRT butterfly?
- The breakeven for the NXRT 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 NXRT market-implied 1-standard-deviation expected move is approximately 19.41%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on NXRT?
- Butterflies on NXRT are pinning bets - traders use them when they expect NXRT 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 NXRT implied volatility affect this butterfly?
- NXRT ATM IV is at 67.70% with IV rank near 18.53%, 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.