OSBC Butterfly Strategy
OSBC (Old Second Bancorp, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
Old Second Bancorp, Inc. (OSBC) serves as the parent holding company for Old Second National Bank, providing a full range of community banking services. The institution offers a broad spectrum of deposit products, including demand, NOW, money market, savings, time, and individual retirement accounts, alongside certificates of deposit. Its diverse lending portfolio encompasses commercial loans, lease financing, construction loans, and commercial real estate loans. For residential clients, offerings include first and second mortgages, home equity lines of credit, and general residential real estate loans. Consumer lending options cover needs such as motor vehicle, home improvement, and signature loans, further complemented by installment and agricultural loans, and overdraft checking services. Beyond deposits and loans, Old Second provides vital financial services like safe deposit boxes, trust and wealth management, money orders, cashier's checks, foreign currency exchange, direct deposits, discount brokerage, and debit and credit cards.
OSBC (Old Second Bancorp, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $1.20B, a trailing P/E of 14.31, a beta of 0.72 versus the broader market, a 52-week range of 16.43-23.55, average daily share volume of 399K, a public-listing history dating back to 1993, approximately 877 full-time employees. These structural characteristics shape how OSBC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.72 places OSBC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. OSBC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on OSBC?
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 OSBC snapshot
As of June 30, 2026, spot at $23.27, ATM IV 83.60%, IV rank 15.94%, expected move 23.97%. The butterfly on OSBC 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 OSBC specifically: OSBC IV at 83.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a OSBC butterfly, with a market-implied 1-standard-deviation move of approximately 23.97% (roughly $5.58 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 OSBC expiries trade a higher absolute premium for lower per-day decay. Position sizing on OSBC should anchor to the underlying notional of $23.27 per share and to the trader's directional view on OSBC stock.
OSBC butterfly setup
The OSBC 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 OSBC near $23.27, the first option leg uses a $22.11 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OSBC 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 OSBC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $22.11 | N/A |
| Sell 2 | Call | $23.27 | N/A |
| Buy 1 | Call | $24.43 | N/A |
OSBC 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.
OSBC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on OSBC. 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 OSBC
Butterflies on OSBC are pinning bets - traders use them when they expect OSBC 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.
OSBC thesis for this butterfly
The market-implied 1-standard-deviation range for OSBC extends from approximately $17.69 on the downside to $28.85 on the upside. A OSBC long call butterfly is a pinning play: it pays maximum at the middle strike if OSBC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current OSBC IV rank near 15.94% 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 OSBC at 83.60%. As a Financial Services name, OSBC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OSBC-specific events.
OSBC 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. OSBC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OSBC alongside the broader basket even when OSBC-specific fundamentals are unchanged. Always rebuild the position from current OSBC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on OSBC?
- A butterfly on OSBC is the butterfly strategy applied to OSBC (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 OSBC stock trading near $23.27, the strikes shown on this page are snapped to the nearest listed OSBC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OSBC 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 OSBC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 83.60%), 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 OSBC butterfly?
- The breakeven for the OSBC 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 OSBC market-implied 1-standard-deviation expected move is approximately 23.97%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on OSBC?
- Butterflies on OSBC are pinning bets - traders use them when they expect OSBC 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 OSBC implied volatility affect this butterfly?
- OSBC ATM IV is at 83.60% with IV rank near 15.94%, 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.