RUM Butterfly Strategy
RUM (Rumble Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.
Rumble Inc. operates video sharing platforms. The company operates rumble.com, a platform that enables video creators to host, livestream, manage, distribute, and create OTT feeds, as well as monetize their content. It also operates locals.com, a subscription-based video sharing platform. The company was founded in 2013 and is based in Longboat Key, Florida.
RUM (Rumble Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $3.61B, a beta of 1.03 versus the broader market, a 52-week range of 4.62-10.99, average daily share volume of 2.5M, a public-listing history dating back to 2021, approximately 135 full-time employees. These structural characteristics shape how RUM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.03 places RUM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on RUM?
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 RUM snapshot
As of May 15, 2026, spot at $7.33, ATM IV 100.62%, IV rank 60.80%, expected move 28.85%. The butterfly on RUM 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 14-day expiry.
Why this butterfly structure on RUM specifically: RUM IV at 100.62% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 28.85% (roughly $2.11 on the underlying). The 14-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RUM expiries trade a higher absolute premium for lower per-day decay. Position sizing on RUM should anchor to the underlying notional of $7.33 per share and to the trader's directional view on RUM stock.
RUM butterfly setup
The RUM 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 RUM near $7.33, the first option leg uses a $7.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RUM chain at a 14-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 RUM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $7.00 | $0.73 |
| Sell 2 | Call | $7.50 | $0.53 |
| Buy 1 | Call | $7.50 | $0.53 |
RUM butterfly risk and reward
- Net Premium / Debit
- -$20.00
- Max Profit (per contract)
- $30.00
- Max Loss (per contract)
- -$20.00
- Breakeven(s)
- $7.20
- Risk / Reward Ratio
- 1.500
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.
RUM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RUM. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -99.9% | -$20.00 |
| $1.63 | -77.8% | -$20.00 |
| $3.25 | -55.7% | -$20.00 |
| $4.87 | -33.6% | -$20.00 |
| $6.49 | -11.5% | -$20.00 |
| $8.11 | +10.6% | +$30.00 |
| $9.73 | +32.7% | +$30.00 |
| $11.35 | +54.8% | +$30.00 |
| $12.97 | +76.9% | +$30.00 |
| $14.59 | +99.0% | +$30.00 |
When traders use butterfly on RUM
Butterflies on RUM are pinning bets - traders use them when they expect RUM 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.
RUM thesis for this butterfly
The market-implied 1-standard-deviation range for RUM extends from approximately $5.22 on the downside to $9.44 on the upside. A RUM long call butterfly is a pinning play: it pays maximum at the middle strike if RUM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RUM IV rank near 60.80% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on RUM should anchor more to the directional view and the expected-move geometry. As a Technology name, RUM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RUM-specific events.
RUM 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. RUM positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RUM alongside the broader basket even when RUM-specific fundamentals are unchanged. Always rebuild the position from current RUM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RUM?
- A butterfly on RUM is the butterfly strategy applied to RUM (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 RUM stock trading near $7.33, the strikes shown on this page are snapped to the nearest listed RUM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RUM 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 RUM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 100.62%), the computed maximum profit is $30.00 per contract and the computed maximum loss is -$20.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RUM butterfly?
- The breakeven for the RUM butterfly priced on this page is roughly $7.20 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 RUM market-implied 1-standard-deviation expected move is approximately 28.85%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RUM?
- Butterflies on RUM are pinning bets - traders use them when they expect RUM 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 RUM implied volatility affect this butterfly?
- RUM ATM IV is at 100.62% with IV rank near 60.80%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.