RPD Butterfly Strategy
RPD (Rapid7, Inc.), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
Rapid7, Inc. provides cyber security solutions. The company offers a cloud-native insight platform that enables customers to create and manage analytics-driven cyber security risk management programs. Its platform includes InsightIDR, an incident detection and response solution; InsightCloudSec, a solution that integrates posture management, workload protection, infrastructure entitlements management, infrastructure-as-code security, and Kubernetes protection; InsightVM, a vulnerability risk management solution that is designed to provide a way to collect vulnerability data, prioritize risk, and automate remediation; InsightAppSec, which provides application security testing that analyzes web applications for security vulnerabilities; and InsightConnect, a security orchestration and automation response solution that is used by security professionals. The company's other products include DivvyCloud, a cloud security posture management solution; Nexpose, an on-premises version of company's vulnerability risk management solution; AppSpider, an on-premises version of company's application security testing solution; and Metasploit, a penetration testing software solution, as well as professional services. It offers its products through term or perpetual software licenses, cloud-based subscriptions, and managed services. The company serves customers in a range of industries, including technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
RPD (Rapid7, Inc.) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $413.0M, a trailing P/E of 18.25, a beta of 0.89 versus the broader market, a 52-week range of 4.97-25.85, average daily share volume of 2.2M, a public-listing history dating back to 2015, approximately 2K full-time employees. These structural characteristics shape how RPD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.89 places RPD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on RPD?
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 RPD snapshot
As of May 15, 2026, spot at $6.50, ATM IV 84.50%, IV rank 22.21%, expected move 24.23%. The butterfly on RPD 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 98-day expiry.
Why this butterfly structure on RPD specifically: RPD IV at 84.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a RPD butterfly, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $1.57 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RPD expiries trade a higher absolute premium for lower per-day decay. Position sizing on RPD should anchor to the underlying notional of $6.50 per share and to the trader's directional view on RPD stock.
RPD butterfly setup
The RPD 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 RPD near $6.50, the first option leg uses a $6.18 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RPD chain at a 98-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 RPD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $6.18 | N/A |
| Sell 2 | Call | $6.50 | N/A |
| Buy 1 | Call | $6.83 | N/A |
RPD 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.
RPD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RPD. 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 RPD
Butterflies on RPD are pinning bets - traders use them when they expect RPD 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.
RPD thesis for this butterfly
The market-implied 1-standard-deviation range for RPD extends from approximately $4.93 on the downside to $8.07 on the upside. A RPD long call butterfly is a pinning play: it pays maximum at the middle strike if RPD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RPD IV rank near 22.21% 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 RPD at 84.50%. As a Technology name, RPD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RPD-specific events.
RPD 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. RPD positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RPD alongside the broader basket even when RPD-specific fundamentals are unchanged. Always rebuild the position from current RPD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RPD?
- A butterfly on RPD is the butterfly strategy applied to RPD (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 RPD stock trading near $6.50, the strikes shown on this page are snapped to the nearest listed RPD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RPD 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 RPD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 84.50%), 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 RPD butterfly?
- The breakeven for the RPD 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 RPD market-implied 1-standard-deviation expected move is approximately 24.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RPD?
- Butterflies on RPD are pinning bets - traders use them when they expect RPD 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 RPD implied volatility affect this butterfly?
- RPD ATM IV is at 84.50% with IV rank near 22.21%, 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.