REFR Butterfly Strategy
REFR (Research Frontiers Incorporated), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NASDAQ.
Research Frontiers Incorporated develops and markets technology and devices to control the flow of light worldwide. The company develops and licenses suspended particle device (SPD-Smart) light-control technology to companies that manufacture and market the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, the light-control panels made by laminating the film, and electronics to power end-products incorporating the film, as well as lamination services for and the end-products, such as windows, skylights, and sunroofs. Its SPD-Smart light-control technology is used in various product applications, including windows, sunshades, skylights, and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels, and navigation systems; aircraft windows; museum display panels, and eyewear products; and flat panel displays for electronic products. The company serves architectural, automotive, marine, and aerospace and appliance applications. Research Frontiers Incorporated was incorporated in 1965 and is headquartered in Woodbury, New York.
REFR (Research Frontiers Incorporated) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $27.5M, a beta of 0.54 versus the broader market, a 52-week range of 0.75-2.7, average daily share volume of 35K, a public-listing history dating back to 1986, approximately 6 full-time employees. These structural characteristics shape how REFR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.54 indicates REFR 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 REFR?
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 REFR snapshot
As of May 15, 2026, spot at $0.81, ATM IV 26.70%, IV rank 2.15%, expected move 7.65%. The butterfly on REFR 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 REFR specifically: REFR IV at 26.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a REFR butterfly, with a market-implied 1-standard-deviation move of approximately 7.65% (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 REFR expiries trade a higher absolute premium for lower per-day decay. Position sizing on REFR should anchor to the underlying notional of $0.81 per share and to the trader's directional view on REFR stock.
REFR butterfly setup
The REFR 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 REFR near $0.81, the first option leg uses a $0.77 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed REFR 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 REFR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.77 | N/A |
| Sell 2 | Call | $0.81 | N/A |
| Buy 1 | Call | $0.85 | N/A |
REFR 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.
REFR butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on REFR. 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 REFR
Butterflies on REFR are pinning bets - traders use them when they expect REFR 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.
REFR thesis for this butterfly
The market-implied 1-standard-deviation range for REFR extends from approximately $0.75 on the downside to $0.87 on the upside. A REFR long call butterfly is a pinning play: it pays maximum at the middle strike if REFR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current REFR IV rank near 2.15% 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 REFR at 26.70%. As a Technology name, REFR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to REFR-specific events.
REFR 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. REFR positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move REFR alongside the broader basket even when REFR-specific fundamentals are unchanged. Always rebuild the position from current REFR chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on REFR?
- A butterfly on REFR is the butterfly strategy applied to REFR (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 REFR stock trading near $0.81, the strikes shown on this page are snapped to the nearest listed REFR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are REFR 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 REFR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.70%), 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 REFR butterfly?
- The breakeven for the REFR 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 REFR market-implied 1-standard-deviation expected move is approximately 7.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on REFR?
- Butterflies on REFR are pinning bets - traders use them when they expect REFR 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 REFR implied volatility affect this butterfly?
- REFR ATM IV is at 26.70% with IV rank near 2.15%, 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.