RCON Butterfly Strategy
RCON (Recon Technology, Ltd.), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NASDAQ.
Recon Technology, Ltd. provides hardware, software, and on-site services to companies in the petroleum mining and extraction industry in the People's Republic of China. The company offers equipment, tools, and other hardware related to oilfield production and management, and transportation; and develops and sells industrial automation control and information solutions. It also provides equipment for oil and gas production and transportation, including heating furnaces and burner, as well as enhancing techniques comprising packers of fracturing; production packers; sand prevention in oil and water wells; water locating and plugging techniques; fissure shaper; fracture acidizing techniques; and electronic broken-down services to resolve block-up and freezing problems. In addition, the company offers automation systems and services, including pumping unit controller that monitors the pumping units and collects data; RTU to monitor natural gas wells and collect gas well pressure data; wireless dynamometers and wireless pressure gauges; electric multi-way valves for oilfield metering station flow control; and natural gas flow computer systems. Further, it provides Recon SCADA oilfield monitor and data acquisition system for supervision and data collection; EPC service of pipeline SCADA system for pipeline monitoring and data acquisition; EPC service of oil and gas wells SCADA system for monitoring and data acquisition of oil wells and natural gas wells; EPC service of oilfield video surveillance and control system to control the oil and gas wellhead and measurement station areas; and technique service for digital oilfield transformation. Additionally, the company offers oilfield waste water treatment solutions and related chemicals; and oily sludge disposal solutions.
RCON (Recon Technology, Ltd.) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $21.1M, a beta of 1.53 versus the broader market, a 52-week range of 0.66-7.16, average daily share volume of 79K, a public-listing history dating back to 2009, approximately 184 full-time employees. These structural characteristics shape how RCON stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.53 indicates RCON 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 RCON?
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 RCON snapshot
As of May 15, 2026, spot at $0.67, ATM IV 30.40%, IV rank 2.69%, expected move 8.72%. The butterfly on RCON 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 RCON specifically: RCON IV at 30.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a RCON butterfly, with a market-implied 1-standard-deviation move of approximately 8.72% (roughly $0.06 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 RCON expiries trade a higher absolute premium for lower per-day decay. Position sizing on RCON should anchor to the underlying notional of $0.67 per share and to the trader's directional view on RCON stock.
RCON butterfly setup
The RCON 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 RCON near $0.67, the first option leg uses a $0.64 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RCON 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 RCON shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.64 | N/A |
| Sell 2 | Call | $0.67 | N/A |
| Buy 1 | Call | $0.70 | N/A |
RCON 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.
RCON butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RCON. 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 RCON
Butterflies on RCON are pinning bets - traders use them when they expect RCON 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.
RCON thesis for this butterfly
The market-implied 1-standard-deviation range for RCON extends from approximately $0.61 on the downside to $0.73 on the upside. A RCON long call butterfly is a pinning play: it pays maximum at the middle strike if RCON settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RCON IV rank near 2.69% 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 RCON at 30.40%. As a Energy name, RCON options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RCON-specific events.
RCON 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. RCON positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RCON alongside the broader basket even when RCON-specific fundamentals are unchanged. Always rebuild the position from current RCON chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RCON?
- A butterfly on RCON is the butterfly strategy applied to RCON (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 RCON stock trading near $0.67, the strikes shown on this page are snapped to the nearest listed RCON chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RCON 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 RCON butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 30.40%), 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 RCON butterfly?
- The breakeven for the RCON 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 RCON market-implied 1-standard-deviation expected move is approximately 8.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RCON?
- Butterflies on RCON are pinning bets - traders use them when they expect RCON 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 RCON implied volatility affect this butterfly?
- RCON ATM IV is at 30.40% with IV rank near 2.69%, 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.