PACB Butterfly Strategy
PACB (Pacific Biosciences of California, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Pacific Biosciences of California, Inc. (PACB) specializes in pioneering and manufacturing advanced genetic sequencing platforms, empowering researchers and institutions to unravel intricate genetic challenges. At the heart of its offerings are the proprietary PacBio Sequencing Systems, designed for executing, monitoring, and interpreting biochemical sequencing reactions. Complementing these instruments are essential consumable products, such as their unique single molecule real-time (SMRT) cells. Furthermore, the company supplies a comprehensive suite of workflow-specific reagent kits. These include template preparation kits, which utilize molecular biology reagents (like ligase, buffers, and exonucleases) to convert DNA into SMRTbell double-stranded DNA libraries. Binding kits, featuring modified DNA polymerase, facilitate the crucial attachment of SMRTbell libraries to the polymerase in readiness for sequencing.
PACB (Pacific Biosciences of California, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $344.8M, a beta of 2.32 versus the broader market, a 52-week range of 1.07-2.73, average daily share volume of 6.4M, a public-listing history dating back to 2010, approximately 485 full-time employees. These structural characteristics shape how PACB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.32 indicates PACB 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 PACB?
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.
PACB snapshot
As of August 14, 2026, spot at $1.15, ATM IV 267.30%, IV rank 64.72%, expected move 76.63%. The butterfly on PACB below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on PACB specifically: PACB IV at 267.30% 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 76.63% (roughly $0.88 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PACB expiries trade a higher absolute premium for lower per-day decay. Position sizing on PACB should anchor to the underlying notional of $1.15 per share and to the trader's directional view on PACB stock.
PACB butterfly setup
The PACB 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 PACB at $1.15 on that close, the first option leg uses a $1.09 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PACB chain at a 35-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 PACB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $1.09 | N/A |
| Sell 2 | Call | $1.15 | N/A |
| Buy 1 | Call | $1.21 | N/A |
PACB 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.
PACB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PACB. 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 PACB
Butterflies on PACB are pinning bets - traders use them when they expect PACB 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.
PACB thesis for this butterfly
The market-implied 1-standard-deviation range for PACB extends from approximately $0.27 on the downside to $2.03 on the upside. A PACB long call butterfly is a pinning play: it pays maximum at the middle strike if PACB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PACB IV rank near 64.72% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on PACB should anchor more to the directional view and the expected-move geometry. As a Healthcare name, PACB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PACB-specific events.
PACB 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. PACB positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PACB alongside the broader basket even when PACB-specific fundamentals are unchanged. Always rebuild the position from current PACB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PACB?
- A butterfly on PACB is the butterfly strategy applied to PACB (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 PACB stock at $1.15 on the most recent close, the strikes shown on this page are snapped to the nearest listed PACB chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PACB 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 PACB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 267.30%), 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 PACB butterfly?
- The breakeven for the PACB butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The PACB market-implied 1-standard-deviation expected move in the same options snapshot is approximately 76.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PACB?
- Butterflies on PACB are pinning bets - traders use them when they expect PACB 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 PACB implied volatility affect this butterfly?
- PACB ATM IV is at 267.30% with IV rank near 64.72%, 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.