RGCO Butterfly Strategy
RGCO (RGC Resources, Inc.), in the Utilities sector, (Regulated Gas industry), listed on NASDAQ.
RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,157 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates 6 metering stations. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.
RGCO (RGC Resources, Inc.) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $241.9M, a trailing P/E of 16.94, a beta of 0.51 versus the broader market, a 52-week range of 19.68-24.5, average daily share volume of 12K, a public-listing history dating back to 1994, approximately 104 full-time employees. These structural characteristics shape how RGCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.51 indicates RGCO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. RGCO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on RGCO?
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 RGCO snapshot
As of May 15, 2026, spot at $22.13, ATM IV 89.90%, IV rank 26.89%, expected move 25.77%. The butterfly on RGCO 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 RGCO specifically: RGCO IV at 89.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a RGCO butterfly, with a market-implied 1-standard-deviation move of approximately 25.77% (roughly $5.70 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 RGCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on RGCO should anchor to the underlying notional of $22.13 per share and to the trader's directional view on RGCO stock.
RGCO butterfly setup
The RGCO 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 RGCO near $22.13, the first option leg uses a $21.02 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RGCO 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 RGCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $21.02 | N/A |
| Sell 2 | Call | $22.13 | N/A |
| Buy 1 | Call | $23.24 | N/A |
RGCO 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.
RGCO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RGCO. 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 RGCO
Butterflies on RGCO are pinning bets - traders use them when they expect RGCO 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.
RGCO thesis for this butterfly
The market-implied 1-standard-deviation range for RGCO extends from approximately $16.43 on the downside to $27.83 on the upside. A RGCO long call butterfly is a pinning play: it pays maximum at the middle strike if RGCO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RGCO IV rank near 26.89% 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 RGCO at 89.90%. As a Utilities name, RGCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RGCO-specific events.
RGCO 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. RGCO positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RGCO alongside the broader basket even when RGCO-specific fundamentals are unchanged. Always rebuild the position from current RGCO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RGCO?
- A butterfly on RGCO is the butterfly strategy applied to RGCO (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 RGCO stock trading near $22.13, the strikes shown on this page are snapped to the nearest listed RGCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RGCO 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 RGCO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 89.90%), 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 RGCO butterfly?
- The breakeven for the RGCO 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 RGCO market-implied 1-standard-deviation expected move is approximately 25.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RGCO?
- Butterflies on RGCO are pinning bets - traders use them when they expect RGCO 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 RGCO implied volatility affect this butterfly?
- RGCO ATM IV is at 89.90% with IV rank near 26.89%, 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.