RAPP Butterfly Strategy
RAPP (Rapport Therapeutics, Inc. Common Stock), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Rapport Therapeutics, Inc., operates as a clinical-stage biopharmaceutical company that focuses on the discovery and development of transformational small molecule medicines for patients suffering from central nervous system (CNS) disorders. Its lead product candidate is receptor associated protein (RAP)-219, an investigational small molecule that is designed to inhibit TARPy8-containing AMPARs with picomolar affinity for the treatment of focal epilepsy and other CNS disorders, including peripheral neuropathic pain and bipolar disorder. The company also develops RAP-199, a TARPy8 targeted molecule with differentiated chemical and pharmacokinetic properties; and nicotinic acetylcholine receptor (nAChR) programs, such as a6 nAChR to treat chronic pain and a9a10 nAChR for the treatment of hearing disorders. The company was formerly known as Precision Neuroscience NewCo, Inc. and changed its name to Rapport Therapeutics, Inc. in October 2022. Rapport Therapeutics, Inc. was incorporated in 2022 and is based in Boston, Massachusetts.
RAPP (Rapport Therapeutics, Inc. Common Stock) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $1.39B, a beta of 0.82 versus the broader market, a 52-week range of 7.73-42.269, average daily share volume of 353K, a public-listing history dating back to 2024, approximately 69 full-time employees. These structural characteristics shape how RAPP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.82 places RAPP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on RAPP?
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 RAPP snapshot
As of May 15, 2026, spot at $37.12, ATM IV 75.50%, IV rank 4.51%, expected move 21.65%. The butterfly on RAPP 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 34-day expiry.
Why this butterfly structure on RAPP specifically: RAPP IV at 75.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a RAPP butterfly, with a market-implied 1-standard-deviation move of approximately 21.65% (roughly $8.03 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RAPP expiries trade a higher absolute premium for lower per-day decay. Position sizing on RAPP should anchor to the underlying notional of $37.12 per share and to the trader's directional view on RAPP stock.
RAPP butterfly setup
The RAPP 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 RAPP near $37.12, the first option leg uses a $35.26 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RAPP chain at a 34-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 RAPP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $35.26 | N/A |
| Sell 2 | Call | $37.12 | N/A |
| Buy 1 | Call | $38.98 | N/A |
RAPP 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.
RAPP butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RAPP. 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 RAPP
Butterflies on RAPP are pinning bets - traders use them when they expect RAPP 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.
RAPP thesis for this butterfly
The market-implied 1-standard-deviation range for RAPP extends from approximately $29.09 on the downside to $45.15 on the upside. A RAPP long call butterfly is a pinning play: it pays maximum at the middle strike if RAPP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RAPP IV rank near 4.51% 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 RAPP at 75.50%. As a Healthcare name, RAPP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RAPP-specific events.
RAPP 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. RAPP positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RAPP alongside the broader basket even when RAPP-specific fundamentals are unchanged. Always rebuild the position from current RAPP chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RAPP?
- A butterfly on RAPP is the butterfly strategy applied to RAPP (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 RAPP stock trading near $37.12, the strikes shown on this page are snapped to the nearest listed RAPP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RAPP 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 RAPP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 75.50%), 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 RAPP butterfly?
- The breakeven for the RAPP 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 RAPP market-implied 1-standard-deviation expected move is approximately 21.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RAPP?
- Butterflies on RAPP are pinning bets - traders use them when they expect RAPP 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 RAPP implied volatility affect this butterfly?
- RAPP ATM IV is at 75.50% with IV rank near 4.51%, 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.