PRM Butterfly Strategy
PRM (Perimeter Solutions, S.A.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NYSE.
Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Oil Additives. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Oil Additives segment produces Phosphorus Pentasulfide which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the brands PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG. and BIOGEMA. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.
PRM (Perimeter Solutions, S.A.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $5.53B, a beta of 1.93 versus the broader market, a 52-week range of 11.545-34.29, average daily share volume of 1.2M, a public-listing history dating back to 2021, approximately 319 full-time employees. These structural characteristics shape how PRM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.93 indicates PRM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on PRM?
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 PRM snapshot
As of May 14, 2026, spot at $34.54, ATM IV 42.90%, IV rank 14.17%, expected move 12.30%. The butterfly on PRM 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 35-day expiry.
Why this butterfly structure on PRM specifically: PRM IV at 42.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a PRM butterfly, with a market-implied 1-standard-deviation move of approximately 12.30% (roughly $4.25 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 PRM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PRM should anchor to the underlying notional of $34.54 per share and to the trader's directional view on PRM stock.
PRM butterfly setup
The PRM 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 PRM near $34.54, the first option leg uses a $32.81 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PRM 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 PRM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $32.81 | N/A |
| Sell 2 | Call | $34.54 | N/A |
| Buy 1 | Call | $36.27 | N/A |
PRM 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.
PRM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PRM. 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 PRM
Butterflies on PRM are pinning bets - traders use them when they expect PRM 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.
PRM thesis for this butterfly
The market-implied 1-standard-deviation range for PRM extends from approximately $30.29 on the downside to $38.79 on the upside. A PRM long call butterfly is a pinning play: it pays maximum at the middle strike if PRM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PRM IV rank near 14.17% 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 PRM at 42.90%. As a Basic Materials name, PRM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PRM-specific events.
PRM 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. PRM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PRM alongside the broader basket even when PRM-specific fundamentals are unchanged. Always rebuild the position from current PRM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PRM?
- A butterfly on PRM is the butterfly strategy applied to PRM (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 PRM stock trading near $34.54, the strikes shown on this page are snapped to the nearest listed PRM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PRM 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 PRM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 42.90%), 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 PRM butterfly?
- The breakeven for the PRM 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 PRM market-implied 1-standard-deviation expected move is approximately 12.30%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PRM?
- Butterflies on PRM are pinning bets - traders use them when they expect PRM 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 PRM implied volatility affect this butterfly?
- PRM ATM IV is at 42.90% with IV rank near 14.17%, 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.