PDM Butterfly Strategy
PDM (Piedmont Office Realty Trust, Inc.), in the Real Estate sector, (REIT - Office industry), listed on NYSE.
Piedmont Office Realty Trust, Inc. (PDM), traded on the NYSE, is a real estate investment trust that acquires, manages, develops, and operates premium, Class A office properties. These assets are strategically situated in key sub-markets across seven major Eastern U.S. office markets, with the Sunbelt region contributing the majority of its revenue. The company's geographically diversified portfolio encompasses approximately 17 million square feet, valued at roughly $5 billion. As a self-managed and fully integrated REIT, Piedmont maintains local management teams within each of its operational markets and holds investment-grade credit ratings from S&P Global Ratings (BBB) and Moody's (Baa2). Demonstrating its commitment to sustainability, by the close of the third quarter, approximately 63% of its portfolio was ENERGY STAR certified, and around 41% had achieved LEED certification.
PDM (Piedmont Office Realty Trust, Inc.) trades in the Real Estate sector, specifically REIT - Office, with a market capitalization of approximately $1.19B, a beta of 1.37 versus the broader market, a 52-week range of 6.32-9.5, average daily share volume of 1.2M, a public-listing history dating back to 2010, approximately 150 full-time employees. These structural characteristics shape how PDM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.37 indicates PDM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. PDM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PDM?
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 PDM snapshot
As of June 30, 2026, spot at $9.25, ATM IV 72.70%, IV rank 31.23%, expected move 20.84%. The butterfly on PDM 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 PDM specifically: PDM IV at 72.70% 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 20.84% (roughly $1.93 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 PDM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PDM should anchor to the underlying notional of $9.25 per share and to the trader's directional view on PDM stock.
PDM butterfly setup
The PDM 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 PDM near $9.25, the first option leg uses a $8.79 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PDM 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 PDM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $8.79 | N/A |
| Sell 2 | Call | $9.25 | N/A |
| Buy 1 | Call | $9.71 | N/A |
PDM 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.
PDM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PDM. 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 PDM
Butterflies on PDM are pinning bets - traders use them when they expect PDM 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.
PDM thesis for this butterfly
The market-implied 1-standard-deviation range for PDM extends from approximately $7.32 on the downside to $11.18 on the upside. A PDM long call butterfly is a pinning play: it pays maximum at the middle strike if PDM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PDM IV rank near 31.23% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on PDM should anchor more to the directional view and the expected-move geometry. As a Real Estate name, PDM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PDM-specific events.
PDM 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. PDM positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PDM alongside the broader basket even when PDM-specific fundamentals are unchanged. Always rebuild the position from current PDM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PDM?
- A butterfly on PDM is the butterfly strategy applied to PDM (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 PDM stock trading near $9.25, the strikes shown on this page are snapped to the nearest listed PDM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PDM 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 PDM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 72.70%), 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 PDM butterfly?
- The breakeven for the PDM 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 PDM market-implied 1-standard-deviation expected move is approximately 20.84%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PDM?
- Butterflies on PDM are pinning bets - traders use them when they expect PDM 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 PDM implied volatility affect this butterfly?
- PDM ATM IV is at 72.70% with IV rank near 31.23%, 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.