OPTT Butterfly Strategy
OPTT (Ocean Power Technologies, Inc.), in the Industrials sector, (Electrical Equipment & Parts industry), listed on AMEX.
Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North America, South America, Europe, and Asia. It offers PB3 PowerBuoy system that generates power for use independent of the power grid in offshore locations. The company also provides hybrid PowerBuoy products; subsea battery systems; and software, controls, sensors, integration services, and marine installation services. In addition, it offers distributed offshore power and communications for remote surface and subsea applications in markets, such as defense and security, offshore oil and gas, science and research, and offshore wind. Further, the company provides Wave Adaptive Modular Vessel (WAM-V) technology, which enables roaming capabilities for uncrewed maritime systems in waters; leases WAM-V robotics and access information; maritime domain awareness solutions; and strategic consulting services. Additionally, it offers offshore data collection, integration, analytics, and real time communication for various applications.
OPTT (Ocean Power Technologies, Inc.) trades in the Industrials sector, specifically Electrical Equipment & Parts, with a market capitalization of approximately $61.5M, a beta of 2.55 versus the broader market, a 52-week range of 0.29-0.9, average daily share volume of 5.0M, a public-listing history dating back to 2007, approximately 43 full-time employees. These structural characteristics shape how OPTT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.55 indicates OPTT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on OPTT?
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 OPTT snapshot
As of May 15, 2026, spot at $0.34, ATM IV 23.60%, IV rank 1.34%, expected move 6.77%. The butterfly on OPTT 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 OPTT specifically: OPTT IV at 23.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a OPTT butterfly, with a market-implied 1-standard-deviation move of approximately 6.77% (roughly $0.02 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 OPTT expiries trade a higher absolute premium for lower per-day decay. Position sizing on OPTT should anchor to the underlying notional of $0.34 per share and to the trader's directional view on OPTT stock.
OPTT butterfly setup
The OPTT 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 OPTT near $0.34, the first option leg uses a $0.32 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OPTT 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 OPTT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.32 | N/A |
| Sell 2 | Call | $0.34 | N/A |
| Buy 1 | Call | $0.36 | N/A |
OPTT 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.
OPTT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on OPTT. 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 OPTT
Butterflies on OPTT are pinning bets - traders use them when they expect OPTT 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.
OPTT thesis for this butterfly
The market-implied 1-standard-deviation range for OPTT extends from approximately $0.32 on the downside to $0.36 on the upside. A OPTT long call butterfly is a pinning play: it pays maximum at the middle strike if OPTT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current OPTT IV rank near 1.34% 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 OPTT at 23.60%. As a Industrials name, OPTT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OPTT-specific events.
OPTT 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. OPTT positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OPTT alongside the broader basket even when OPTT-specific fundamentals are unchanged. Always rebuild the position from current OPTT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on OPTT?
- A butterfly on OPTT is the butterfly strategy applied to OPTT (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 OPTT stock trading near $0.34, the strikes shown on this page are snapped to the nearest listed OPTT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OPTT 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 OPTT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.60%), 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 OPTT butterfly?
- The breakeven for the OPTT 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 OPTT market-implied 1-standard-deviation expected move is approximately 6.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on OPTT?
- Butterflies on OPTT are pinning bets - traders use them when they expect OPTT 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 OPTT implied volatility affect this butterfly?
- OPTT ATM IV is at 23.60% with IV rank near 1.34%, 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.