PK Butterfly Strategy
PK (Park Hotels & Resorts Inc.), in the Real Estate sector, (REIT - Hotel & Motel industry), listed on NYSE.
Park Hotels & Resorts Inc. operates as the second-largest publicly traded real estate investment trust (REIT) focused on the lodging sector. It manages a diversified collection of 60 premium-branded hotels and resorts, which are market leaders and possess considerable underlying real estate value. These properties include over 33,000 guest rooms, predominantly situated in prime urban centers and popular resort destinations.
PK (Park Hotels & Resorts Inc.) trades in the Real Estate sector, specifically REIT - Hotel & Motel, with a market capitalization of approximately $2.99B, a beta of 1.34 versus the broader market, a 52-week range of 9.84-15.48, average daily share volume of 4.9M, a public-listing history dating back to 2017, approximately 90 full-time employees. These structural characteristics shape how PK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.34 indicates PK has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. PK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on PK?
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.
PK snapshot
As of August 14, 2026, spot at $15.13, ATM IV 22.90%, IV rank 3.51%, expected move 6.57%. The butterfly on PK 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 PK specifically: PK IV at 22.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a PK butterfly, with a market-implied 1-standard-deviation move of approximately 6.57% (roughly $0.99 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 PK expiries trade a higher absolute premium for lower per-day decay. Position sizing on PK should anchor to the underlying notional of $15.13 per share and to the trader's directional view on PK stock.
PK butterfly setup
The PK 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 PK at $15.13 on that close, the first option leg uses a $14.37 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PK 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 PK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $14.37 | N/A |
| Sell 2 | Call | $15.13 | N/A |
| Buy 1 | Call | $15.89 | N/A |
PK 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.
PK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PK. 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 PK
Butterflies on PK are pinning bets - traders use them when they expect PK 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.
PK thesis for this butterfly
The market-implied 1-standard-deviation range for PK extends from approximately $14.14 on the downside to $16.12 on the upside. A PK long call butterfly is a pinning play: it pays maximum at the middle strike if PK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PK IV rank near 3.51% 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 PK at 22.90%. As a Real Estate name, PK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PK-specific events.
PK 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. PK positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PK alongside the broader basket even when PK-specific fundamentals are unchanged. Always rebuild the position from current PK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PK?
- A butterfly on PK is the butterfly strategy applied to PK (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 PK stock at $15.13 on the most recent close, the strikes shown on this page are snapped to the nearest listed PK chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PK 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 PK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.90%), 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 PK butterfly?
- The breakeven for the PK 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 PK market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PK?
- Butterflies on PK are pinning bets - traders use them when they expect PK 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 PK implied volatility affect this butterfly?
- PK ATM IV is at 22.90% with IV rank near 3.51%, 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.