OFS Butterfly Strategy
OFS (OFS Capital Corporation), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
OFS Capital Corporation functions as a business development company, delivering adaptable capital solutions, predominantly through debt financing and, to a lesser degree, minority equity investments. The firm concentrates on U.S.-based middle-market enterprises across a wide spectrum of sectors, deliberately avoiding investments in operational turnarounds or nascent businesses. Its investment approach encompasses direct funding, participating in funds, and facilitating add-on acquisitions. Within its direct investment strategy, OFS Capital provides expertise in various financial structures, including debt and structured equity, recapitalizations, refinancing operations, management and leveraged buyouts, acquisition funding, events for shareholder liquidity, and growth capital. It also supports independent sponsor transactions, Employee Stock Ownership Plans (ESOPs), and minority investments in lower middle-market companies. Targeted industries include aerospace and defense, business services, consumer products and services, food and beverage, healthcare services, specialty chemicals, transportation and logistics, value-added distribution, franchising, and niche industrial manufacturing.
OFS (OFS Capital Corporation) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $45.4M, a beta of 0.92 versus the broader market, a 52-week range of 2.72-8.99, average daily share volume of 74K, a public-listing history dating back to 2012, approximately 53 full-time employees. These structural characteristics shape how OFS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.92 places OFS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. OFS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on OFS?
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 OFS snapshot
As of June 29, 2026, spot at $3.40, ATM IV 159.70%, IV rank 50.71%, expected move 45.78%. The butterfly on OFS 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 OFS specifically: OFS IV at 159.70% 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 45.78% (roughly $1.56 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 OFS expiries trade a higher absolute premium for lower per-day decay. Position sizing on OFS should anchor to the underlying notional of $3.40 per share and to the trader's directional view on OFS stock.
OFS butterfly setup
The OFS 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 OFS near $3.40, the first option leg uses a $3.23 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OFS 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 OFS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.23 | N/A |
| Sell 2 | Call | $3.40 | N/A |
| Buy 1 | Call | $3.57 | N/A |
OFS 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.
OFS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on OFS. 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 OFS
Butterflies on OFS are pinning bets - traders use them when they expect OFS 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.
OFS thesis for this butterfly
The market-implied 1-standard-deviation range for OFS extends from approximately $1.84 on the downside to $4.96 on the upside. A OFS long call butterfly is a pinning play: it pays maximum at the middle strike if OFS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current OFS IV rank near 50.71% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on OFS should anchor more to the directional view and the expected-move geometry. As a Financial Services name, OFS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OFS-specific events.
OFS 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. OFS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OFS alongside the broader basket even when OFS-specific fundamentals are unchanged. Always rebuild the position from current OFS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on OFS?
- A butterfly on OFS is the butterfly strategy applied to OFS (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 OFS stock trading near $3.40, the strikes shown on this page are snapped to the nearest listed OFS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OFS 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 OFS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 159.70%), 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 OFS butterfly?
- The breakeven for the OFS 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 OFS market-implied 1-standard-deviation expected move is approximately 45.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on OFS?
- Butterflies on OFS are pinning bets - traders use them when they expect OFS 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 OFS implied volatility affect this butterfly?
- OFS ATM IV is at 159.70% with IV rank near 50.71%, 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.