ONB Butterfly Strategy
ONB (Old National Bancorp), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, health savings, and capital markets services, as well as community development lending and equity investment solutions. As of December 31, 2021, it operated a total of 162 banking centers located primarily in the states of Indiana, Kentucky, Michigan, Minnesota, and Wisconsin. Old National Bancorp was founded in 1834 and is headquartered in Evansville, Indiana.
ONB (Old National Bancorp) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $9.06B, a trailing P/E of 11.93, a beta of 0.85 versus the broader market, a 52-week range of 19.39-26.17, average daily share volume of 3.2M, a public-listing history dating back to 1984, approximately 4K full-time employees. These structural characteristics shape how ONB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.85 places ONB roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.93 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. ONB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ONB?
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 ONB snapshot
As of May 15, 2026, spot at $23.29, ATM IV 28.90%, IV rank 11.39%, expected move 8.29%. The butterfly on ONB 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 ONB specifically: ONB IV at 28.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a ONB butterfly, with a market-implied 1-standard-deviation move of approximately 8.29% (roughly $1.93 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 ONB expiries trade a higher absolute premium for lower per-day decay. Position sizing on ONB should anchor to the underlying notional of $23.29 per share and to the trader's directional view on ONB stock.
ONB butterfly setup
The ONB 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 ONB near $23.29, the first option leg uses a $22.13 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ONB 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 ONB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $22.13 | N/A |
| Sell 2 | Call | $23.29 | N/A |
| Buy 1 | Call | $24.45 | N/A |
ONB 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.
ONB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ONB. 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 ONB
Butterflies on ONB are pinning bets - traders use them when they expect ONB 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.
ONB thesis for this butterfly
The market-implied 1-standard-deviation range for ONB extends from approximately $21.36 on the downside to $25.22 on the upside. A ONB long call butterfly is a pinning play: it pays maximum at the middle strike if ONB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ONB IV rank near 11.39% 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 ONB at 28.90%. As a Financial Services name, ONB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ONB-specific events.
ONB 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. ONB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ONB alongside the broader basket even when ONB-specific fundamentals are unchanged. Always rebuild the position from current ONB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ONB?
- A butterfly on ONB is the butterfly strategy applied to ONB (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 ONB stock trading near $23.29, the strikes shown on this page are snapped to the nearest listed ONB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ONB 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 ONB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.90%), 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 ONB butterfly?
- The breakeven for the ONB 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 ONB market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ONB?
- Butterflies on ONB are pinning bets - traders use them when they expect ONB 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 ONB implied volatility affect this butterfly?
- ONB ATM IV is at 28.90% with IV rank near 11.39%, 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.