PB Butterfly Strategy
PB (Prosperity Bancshares, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. As of December 31, 2021, the company operated 273 full-service banking locations comprising 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 in the Dallas/Fort Worth, Texas area; 22 in the East Texas area; 29 in the Central Texas area, including Austin and San Antonio; 34 in the West Texas area, including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area doing business as LegacyTexas Bank. Prosperity Bancshares, Inc. was founded in 1983 and is based in Houston, Texas.
PB (Prosperity Bancshares, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $6.69B, a trailing P/E of 12.51, a beta of 0.67 versus the broader market, a 52-week range of 61.07-77.2, average daily share volume of 1.1M, a public-listing history dating back to 1998, approximately 4K full-time employees. These structural characteristics shape how PB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.67 indicates PB has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PB?
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 PB snapshot
As of May 15, 2026, spot at $66.53, ATM IV 32.00%, IV rank 5.21%, expected move 9.17%. The butterfly on PB 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 PB specifically: PB IV at 32.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a PB butterfly, with a market-implied 1-standard-deviation move of approximately 9.17% (roughly $6.10 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 PB expiries trade a higher absolute premium for lower per-day decay. Position sizing on PB should anchor to the underlying notional of $66.53 per share and to the trader's directional view on PB stock.
PB butterfly setup
The PB 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 PB near $66.53, the first option leg uses a $63.20 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PB 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 PB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $63.20 | N/A |
| Sell 2 | Call | $66.53 | N/A |
| Buy 1 | Call | $69.86 | N/A |
PB 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.
PB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PB. 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 PB
Butterflies on PB are pinning bets - traders use them when they expect PB 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.
PB thesis for this butterfly
The market-implied 1-standard-deviation range for PB extends from approximately $60.43 on the downside to $72.63 on the upside. A PB long call butterfly is a pinning play: it pays maximum at the middle strike if PB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PB IV rank near 5.21% 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 PB at 32.00%. As a Financial Services name, PB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PB-specific events.
PB 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. PB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PB alongside the broader basket even when PB-specific fundamentals are unchanged. Always rebuild the position from current PB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PB?
- A butterfly on PB is the butterfly strategy applied to PB (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 PB stock trading near $66.53, the strikes shown on this page are snapped to the nearest listed PB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PB 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 PB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.00%), 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 PB butterfly?
- The breakeven for the PB 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 PB market-implied 1-standard-deviation expected move is approximately 9.17%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PB?
- Butterflies on PB are pinning bets - traders use them when they expect PB 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 PB implied volatility affect this butterfly?
- PB ATM IV is at 32.00% with IV rank near 5.21%, 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.