OHI Butterfly Strategy
OHI (Omega Healthcare Investors, Inc.), in the Real Estate sector, (REIT - Healthcare Facilities industry), listed on NYSE.
Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the US, as well as in the UK.
OHI (Omega Healthcare Investors, Inc.) trades in the Real Estate sector, specifically REIT - Healthcare Facilities, with a market capitalization of approximately $14.29B, a trailing P/E of 22.56, a beta of 0.59 versus the broader market, a 52-week range of 35.7-49.14, average daily share volume of 2.0M, a public-listing history dating back to 1992, approximately 60 full-time employees. These structural characteristics shape how OHI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.59 indicates OHI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. OHI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on OHI?
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 OHI snapshot
As of May 15, 2026, spot at $47.30, ATM IV 20.60%, IV rank 47.85%, expected move 5.91%. The butterfly on OHI 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 OHI specifically: OHI IV at 20.60% 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 5.91% (roughly $2.79 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 OHI expiries trade a higher absolute premium for lower per-day decay. Position sizing on OHI should anchor to the underlying notional of $47.30 per share and to the trader's directional view on OHI stock.
OHI butterfly setup
The OHI 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 OHI near $47.30, the first option leg uses a $45.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OHI 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 OHI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $45.00 | $3.13 |
| Sell 2 | Call | $47.00 | $1.48 |
| Buy 1 | Call | $50.00 | $0.25 |
OHI butterfly risk and reward
- Net Premium / Debit
- -$42.50
- Max Profit (per contract)
- $150.77
- Max Loss (per contract)
- -$142.50
- Breakeven(s)
- $45.43, $48.58
- Risk / Reward Ratio
- 1.058
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.
OHI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on OHI. 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% | -$42.50 |
| $10.47 | -77.9% | -$42.50 |
| $20.92 | -55.8% | -$42.50 |
| $31.38 | -33.7% | -$42.50 |
| $41.84 | -11.5% | -$42.50 |
| $52.30 | +10.6% | -$142.50 |
| $62.75 | +32.7% | -$142.50 |
| $73.21 | +54.8% | -$142.50 |
| $83.67 | +76.9% | -$142.50 |
| $94.12 | +99.0% | -$142.50 |
When traders use butterfly on OHI
Butterflies on OHI are pinning bets - traders use them when they expect OHI 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.
OHI thesis for this butterfly
The market-implied 1-standard-deviation range for OHI extends from approximately $44.51 on the downside to $50.09 on the upside. A OHI long call butterfly is a pinning play: it pays maximum at the middle strike if OHI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current OHI IV rank near 47.85% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on OHI should anchor more to the directional view and the expected-move geometry. As a Real Estate name, OHI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OHI-specific events.
OHI 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. OHI positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OHI alongside the broader basket even when OHI-specific fundamentals are unchanged. Always rebuild the position from current OHI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on OHI?
- A butterfly on OHI is the butterfly strategy applied to OHI (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 OHI stock trading near $47.30, the strikes shown on this page are snapped to the nearest listed OHI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OHI 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 OHI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 20.60%), the computed maximum profit is $150.77 per contract and the computed maximum loss is -$142.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a OHI butterfly?
- The breakeven for the OHI butterfly priced on this page is roughly $45.43 and $48.58 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 OHI market-implied 1-standard-deviation expected move is approximately 5.91%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on OHI?
- Butterflies on OHI are pinning bets - traders use them when they expect OHI 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 OHI implied volatility affect this butterfly?
- OHI ATM IV is at 20.60% with IV rank near 47.85%, 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.