PHG Butterfly Strategy
PHG (Koninklijke Philips N.V.), in the Healthcare sector, (Medical - Devices industry), listed on NYSE.
Koninklijke Philips N.V. operates as a health technology company in North America and internationally. It operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments. The company provides diagnostic imaging solutions, includes magnetic resonance imaging, computed tomography (CT) systems, X-ray systems, and detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; integrated interventional systems; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; proprietary software to enable diagnostics and intervention; and enterprise diagnostic informatics products and services. It also offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions. In addition, the company provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding and digital parental solutions; and male grooming and beauty products and solutions. It has a strategic collaboration with Ibex Medical Analytics Ltd. to jointly promote the digital pathology and AI solutions to hospitals, health networks, and pathology laboratories worldwide, as well as a strategic partnership agreement with NICO.LAB.
PHG (Koninklijke Philips N.V.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $24.40B, a trailing P/E of 21.44, a beta of 0.92 versus the broader market, a 52-week range of 21.95-33.44, average daily share volume of 1.1M, a public-listing history dating back to 1980, approximately 67K full-time employees. These structural characteristics shape how PHG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.92 places PHG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PHG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PHG?
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 PHG snapshot
As of May 15, 2026, spot at $25.24, ATM IV 29.90%, IV rank 3.69%, expected move 8.57%. The butterfly on PHG 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 63-day expiry.
Why this butterfly structure on PHG specifically: PHG IV at 29.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a PHG butterfly, with a market-implied 1-standard-deviation move of approximately 8.57% (roughly $2.16 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PHG expiries trade a higher absolute premium for lower per-day decay. Position sizing on PHG should anchor to the underlying notional of $25.24 per share and to the trader's directional view on PHG stock.
PHG butterfly setup
The PHG 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 PHG near $25.24, the first option leg uses a $24.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PHG chain at a 63-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 PHG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $24.00 | $2.05 |
| Sell 2 | Call | $25.00 | $1.45 |
| Buy 1 | Call | $27.00 | $0.55 |
PHG butterfly risk and reward
- Net Premium / Debit
- +$30.00
- Max Profit (per contract)
- $118.18
- Max Loss (per contract)
- -$70.00
- Breakeven(s)
- $26.30
- Risk / Reward Ratio
- 1.688
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.
PHG butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PHG. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | +$30.00 |
| $5.59 | -77.9% | +$30.00 |
| $11.17 | -55.7% | +$30.00 |
| $16.75 | -33.6% | +$30.00 |
| $22.33 | -11.5% | +$30.00 |
| $27.91 | +10.6% | -$70.00 |
| $33.49 | +32.7% | -$70.00 |
| $39.07 | +54.8% | -$70.00 |
| $44.65 | +76.9% | -$70.00 |
| $50.23 | +99.0% | -$70.00 |
When traders use butterfly on PHG
Butterflies on PHG are pinning bets - traders use them when they expect PHG 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.
PHG thesis for this butterfly
The market-implied 1-standard-deviation range for PHG extends from approximately $23.08 on the downside to $27.40 on the upside. A PHG long call butterfly is a pinning play: it pays maximum at the middle strike if PHG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PHG IV rank near 3.69% 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 PHG at 29.90%. As a Healthcare name, PHG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PHG-specific events.
PHG 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. PHG positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PHG alongside the broader basket even when PHG-specific fundamentals are unchanged. Always rebuild the position from current PHG chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PHG?
- A butterfly on PHG is the butterfly strategy applied to PHG (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 PHG stock trading near $25.24, the strikes shown on this page are snapped to the nearest listed PHG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PHG 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 PHG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.90%), the computed maximum profit is $118.18 per contract and the computed maximum loss is -$70.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PHG butterfly?
- The breakeven for the PHG butterfly priced on this page is roughly $26.30 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 PHG market-implied 1-standard-deviation expected move is approximately 8.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PHG?
- Butterflies on PHG are pinning bets - traders use them when they expect PHG 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 PHG implied volatility affect this butterfly?
- PHG ATM IV is at 29.90% with IV rank near 3.69%, 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.