PAX Butterfly Strategy
PAX (Patria Investments Ltd), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Patria Investments Limited operates as a private market investment firm. It specializes in investments in private equity, secondary direct and indirect and venture capital with focus in middle market, buyout and growth capital investments. It seeks to be sector agnostic with focus on agribusiness, power & energy, healthcare, logistics & transportations, food & beverage, agricultural products, packaged foods and meats, education services, outsourced business services, and digital & tech services. It prefers to invest globally with focus on Latin America, Europe, United States, North America and Brazil. It seeks to invest between $38.48 million and $72.14 million per transaction. The firm seeks a majority or minority stake in its portfolio companies.
PAX (Patria Investments Ltd) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.79B, a trailing P/E of 25.39, a beta of 0.75 versus the broader market, a 52-week range of 10.55-17.8, average daily share volume of 955K, a public-listing history dating back to 2021, approximately 548 full-time employees. These structural characteristics shape how PAX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.75 places PAX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PAX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PAX?
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.
PAX snapshot
As of August 14, 2026, spot at $11.55, ATM IV 99.40%, IV rank 20.53%, expected move 7.47%. The butterfly on PAX 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 PAX specifically: PAX IV at 99.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a PAX butterfly, with a market-implied 1-standard-deviation move of approximately 7.47% (roughly $0.86 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 PAX expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAX should anchor to the underlying notional of $11.55 per share and to the trader's directional view on PAX stock.
PAX butterfly setup
The PAX 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 PAX at $11.55 on that close, the first option leg uses a $10.97 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAX 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 PAX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $10.97 | N/A |
| Sell 2 | Call | $11.55 | N/A |
| Buy 1 | Call | $12.13 | N/A |
PAX 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.
PAX butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PAX. 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 PAX
Butterflies on PAX are pinning bets - traders use them when they expect PAX 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.
PAX thesis for this butterfly
The market-implied 1-standard-deviation range for PAX extends from approximately $10.69 on the downside to $12.41 on the upside. A PAX long call butterfly is a pinning play: it pays maximum at the middle strike if PAX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PAX IV rank near 20.53% 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 PAX at 99.40%. As a Financial Services name, PAX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAX-specific events.
PAX 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. PAX positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PAX alongside the broader basket even when PAX-specific fundamentals are unchanged. Always rebuild the position from current PAX chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PAX?
- A butterfly on PAX is the butterfly strategy applied to PAX (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 PAX stock at $11.55 on the most recent close, the strikes shown on this page are snapped to the nearest listed PAX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PAX 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 PAX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 99.40%), 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 PAX butterfly?
- The breakeven for the PAX 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 PAX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.47%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PAX?
- Butterflies on PAX are pinning bets - traders use them when they expect PAX 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 PAX implied volatility affect this butterfly?
- PAX ATM IV is at 99.40% with IV rank near 20.53%, 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.