POOL Butterfly Strategy
POOL (Pool Corporation), in the Industrials sector, (Industrial - Distribution industry), listed on NASDAQ.
Pool Corporation, established in 1993 and based in Covington, Louisiana, serves as a leading wholesale distributor of swimming pool essentials, outdoor living accessories, and related recreational merchandise. Operating extensively across the United States and globally, the company supported its diverse clientele through 410 sales centers spanning North America, Europe, and Australia as of March 2022. Its comprehensive product portfolio encompasses a broad array of upkeep items like chemicals, general provisions, and pool accouterments; components for servicing and replacing critical pool machinery such as purification systems, heating units, circulation pumps, and lighting fixtures; and structural elements including complete fiberglass pools, luxury spas, and comprehensive pre-packaged pool kits designed for both subterranean and elevated installations, encompassing structural walls, liners, support braces, and coping. Furthermore, Pool Corp. supplies diverse pool apparatus and constituent parts vital for both fresh installations and the refurbishment of existing aquatic facilities; irrigation solutions, including integrated system elements and specialized equipment and provisions for professional lawn maintenance; and construction essentials such as concrete, plumbing and electrical infrastructure, a variety of functional and aesthetic pool finishes, decking options, tiles, hardscaping elements, and natural stone for new builds and renovations. The company also offers specialized commercial-grade products, including robust heating units, essential safety apparatus, and industrial-scale pumps and filtration systems, alongside additional recreational and outdoor living items like barbecues and modules for custom outdoor kitchen setups. Pool Corporation's extensive client base includes swimming pool construction and renovation specialists, independent retailers of pool provisions, repair and maintenance enterprises, irrigation and landscape professionals, and institutional clients such as hospitality venues, educational institutions, and public recreational centers.
POOL (Pool Corporation) trades in the Industrials sector, specifically Industrial - Distribution, with a market capitalization of approximately $7.71B, a trailing P/E of 18.95, a beta of 1.09 versus the broader market, a 52-week range of 172.68-345, average daily share volume of 984K, a public-listing history dating back to 1995, approximately 6K full-time employees. These structural characteristics shape how POOL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.09 places POOL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. POOL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on POOL?
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 POOL snapshot
As of June 29, 2026, spot at $209.91, ATM IV 36.50%, IV rank 46.82%, expected move 10.46%. The butterfly on POOL 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 POOL specifically: POOL IV at 36.50% 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 10.46% (roughly $21.97 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 POOL expiries trade a higher absolute premium for lower per-day decay. Position sizing on POOL should anchor to the underlying notional of $209.91 per share and to the trader's directional view on POOL stock.
POOL butterfly setup
The POOL 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 POOL near $209.91, the first option leg uses a $200.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed POOL 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 POOL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $200.00 | $17.05 |
| Sell 2 | Call | $210.00 | $10.50 |
| Buy 1 | Call | $220.00 | $5.10 |
POOL butterfly risk and reward
- Net Premium / Debit
- -$115.00
- Max Profit (per contract)
- $788.02
- Max Loss (per contract)
- -$115.00
- Breakeven(s)
- $201.15, $218.85
- Risk / Reward Ratio
- 6.852
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.
POOL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on POOL. 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% | -$115.00 |
| $46.42 | -77.9% | -$115.00 |
| $92.83 | -55.8% | -$115.00 |
| $139.24 | -33.7% | -$115.00 |
| $185.65 | -11.6% | -$115.00 |
| $232.07 | +10.6% | -$115.00 |
| $278.48 | +32.7% | -$115.00 |
| $324.89 | +54.8% | -$115.00 |
| $371.30 | +76.9% | -$115.00 |
| $417.71 | +99.0% | -$115.00 |
When traders use butterfly on POOL
Butterflies on POOL are pinning bets - traders use them when they expect POOL 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.
POOL thesis for this butterfly
The market-implied 1-standard-deviation range for POOL extends from approximately $187.94 on the downside to $231.88 on the upside. A POOL long call butterfly is a pinning play: it pays maximum at the middle strike if POOL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current POOL IV rank near 46.82% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on POOL should anchor more to the directional view and the expected-move geometry. As a Industrials name, POOL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to POOL-specific events.
POOL 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. POOL positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move POOL alongside the broader basket even when POOL-specific fundamentals are unchanged. Always rebuild the position from current POOL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on POOL?
- A butterfly on POOL is the butterfly strategy applied to POOL (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 POOL stock trading near $209.91, the strikes shown on this page are snapped to the nearest listed POOL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are POOL 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 POOL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 36.50%), the computed maximum profit is $788.02 per contract and the computed maximum loss is -$115.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a POOL butterfly?
- The breakeven for the POOL butterfly priced on this page is roughly $201.15 and $218.85 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 POOL market-implied 1-standard-deviation expected move is approximately 10.46%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on POOL?
- Butterflies on POOL are pinning bets - traders use them when they expect POOL 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 POOL implied volatility affect this butterfly?
- POOL ATM IV is at 36.50% with IV rank near 46.82%, 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.