OLN Butterfly Strategy
OLN (Olin Corporation), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NYSE.
Olin Corporation is a global producer and supplier of chemical products, serving markets across the United States, Europe, and internationally. The company's operations are divided into three distinct business segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester. The Chlor Alkali Products and Vinyls segment provides a comprehensive range of fundamental industrial chemicals. These include chlorine and caustic soda, key vinyl compounds such as ethylene dichloride and vinyl chloride monomers, and various chlorinated organic compounds like methyl chloride, methylene chloride, chloroform, carbon tetrachloride, and perchloroethylene. This division also supplies essential substances including hydrochloric acid, hydrogen, bleach products, potassium hydroxide, and sodium hypochlorite, alongside chlorinated organic intermediates and solvents, which underpin numerous industrial processes. The Epoxy segment specializes in epoxy materials and their foundational precursors.
OLN (Olin Corporation) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $2.48B, a beta of 1.17 versus the broader market, a 52-week range of 18.08-30.46, average daily share volume of 2.6M, a public-listing history dating back to 1987, approximately 8K full-time employees. These structural characteristics shape how OLN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.17 places OLN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. OLN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on OLN?
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 OLN snapshot
As of June 30, 2026, spot at $19.81, ATM IV 54.20%, IV rank 32.60%, expected move 15.54%. The butterfly on OLN 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 17-day expiry.
Why this butterfly structure on OLN specifically: OLN IV at 54.20% 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 15.54% (roughly $3.08 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated OLN expiries trade a higher absolute premium for lower per-day decay. Position sizing on OLN should anchor to the underlying notional of $19.81 per share and to the trader's directional view on OLN stock.
OLN butterfly setup
The OLN 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 OLN near $19.81, the first option leg uses a $18.82 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OLN chain at a 17-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 OLN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $18.82 | N/A |
| Sell 2 | Call | $19.81 | N/A |
| Buy 1 | Call | $20.80 | N/A |
OLN 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.
OLN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on OLN. 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 OLN
Butterflies on OLN are pinning bets - traders use them when they expect OLN 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.
OLN thesis for this butterfly
The market-implied 1-standard-deviation range for OLN extends from approximately $16.73 on the downside to $22.89 on the upside. A OLN long call butterfly is a pinning play: it pays maximum at the middle strike if OLN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current OLN IV rank near 32.60% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on OLN should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, OLN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OLN-specific events.
OLN 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. OLN positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OLN alongside the broader basket even when OLN-specific fundamentals are unchanged. Always rebuild the position from current OLN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on OLN?
- A butterfly on OLN is the butterfly strategy applied to OLN (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 OLN stock trading near $19.81, the strikes shown on this page are snapped to the nearest listed OLN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OLN 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 OLN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 54.20%), 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 OLN butterfly?
- The breakeven for the OLN 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 OLN market-implied 1-standard-deviation expected move is approximately 15.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on OLN?
- Butterflies on OLN are pinning bets - traders use them when they expect OLN 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 OLN implied volatility affect this butterfly?
- OLN ATM IV is at 54.20% with IV rank near 32.60%, 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.