PROP Butterfly Strategy
PROP (Prairie Operating Co.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NASDAQ.
Prairie Operating Co., headquartered in Oklahoma City, Oklahoma, is focused on developing energy resources to meet growing global demand while simultaneously prioritizing environmental protection. The organization adopted its current name, Prairie Operating Co., in May 2023, having previously operated under the name Creek Road Miners, Inc.
PROP (Prairie Operating Co.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $85.8M, a beta of -0.95 versus the broader market, a 52-week range of 0.58-2.83, average daily share volume of 2.5M, a public-listing history dating back to 2013, approximately 59 full-time employees. These structural characteristics shape how PROP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.95 indicates PROP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on PROP?
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.
PROP snapshot
As of August 14, 2026, spot at $1.00, ATM IV 185.20%, IV rank 67.21%, expected move 53.10%. The butterfly on PROP 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 PROP specifically: PROP IV at 185.20% 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 53.10% (roughly $0.53 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 PROP expiries trade a higher absolute premium for lower per-day decay. Position sizing on PROP should anchor to the underlying notional of $1.00 per share and to the trader's directional view on PROP stock.
PROP butterfly setup
The PROP 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 PROP at $1.00 on that close, the first option leg uses a $0.95 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PROP 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 PROP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.95 | N/A |
| Sell 2 | Call | $1.00 | N/A |
| Buy 1 | Call | $1.05 | N/A |
PROP 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.
PROP butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on PROP. 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 PROP
Butterflies on PROP are pinning bets - traders use them when they expect PROP 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.
PROP thesis for this butterfly
The market-implied 1-standard-deviation range for PROP extends from approximately $0.47 on the downside to $1.53 on the upside. A PROP long call butterfly is a pinning play: it pays maximum at the middle strike if PROP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PROP IV rank near 67.21% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on PROP should anchor more to the directional view and the expected-move geometry. As a Energy name, PROP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PROP-specific events.
PROP 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. PROP positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PROP alongside the broader basket even when PROP-specific fundamentals are unchanged. Always rebuild the position from current PROP chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on PROP?
- A butterfly on PROP is the butterfly strategy applied to PROP (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 PROP stock at $1.00 on the most recent close, the strikes shown on this page are snapped to the nearest listed PROP chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PROP 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 PROP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 185.20%), 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 PROP butterfly?
- The breakeven for the PROP 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 PROP market-implied 1-standard-deviation expected move in the same options snapshot is approximately 53.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on PROP?
- Butterflies on PROP are pinning bets - traders use them when they expect PROP 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 PROP implied volatility affect this butterfly?
- PROP ATM IV is at 185.20% with IV rank near 67.21%, 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.