RUN Butterfly Strategy
RUN (Sunrun Inc.), in the Energy sector, (Solar industry), listed on NASDAQ.
Sunrun Inc. engages in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems in the United States. It also sells solar energy systems and products, such as panels and racking; and solar leads generated to customers. In addition, the company offers battery storage along with solar energy systems. Its primary customers are residential homeowners. The company markets and sells its products through direct-to-consumer approach across online, retail, mass media, digital media, canvassing, field marketing, and referral channels, as well as its partner network. Sunrun Inc. was founded in 2007 and is headquartered in San Francisco, California.
RUN (Sunrun Inc.) trades in the Energy sector, specifically Solar, with a market capitalization of approximately $3.45B, a trailing P/E of 5.97, a beta of 2.25 versus the broader market, a 52-week range of 5.38-22.44, average daily share volume of 10.1M, a public-listing history dating back to 2015, approximately 11K full-time employees. These structural characteristics shape how RUN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.25 indicates RUN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 5.97 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on RUN?
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 RUN snapshot
As of May 15, 2026, spot at $14.12, ATM IV 71.98%, IV rank 14.73%, expected move 20.64%. The butterfly on RUN 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 28-day expiry.
Why this butterfly structure on RUN specifically: RUN IV at 71.98% is on the cheap side of its 1-year range, which favors premium-buying structures like a RUN butterfly, with a market-implied 1-standard-deviation move of approximately 20.64% (roughly $2.91 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RUN expiries trade a higher absolute premium for lower per-day decay. Position sizing on RUN should anchor to the underlying notional of $14.12 per share and to the trader's directional view on RUN stock.
RUN butterfly setup
The RUN 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 RUN near $14.12, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RUN chain at a 28-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 RUN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $13.00 | $1.86 |
| Sell 2 | Call | $14.00 | $1.20 |
| Buy 1 | Call | $15.00 | $0.80 |
RUN butterfly risk and reward
- Net Premium / Debit
- -$27.00
- Max Profit (per contract)
- $67.59
- Max Loss (per contract)
- -$27.00
- Breakeven(s)
- $13.27, $14.73
- Risk / Reward Ratio
- 2.503
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.
RUN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on RUN. 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% | -$27.00 |
| $3.13 | -77.8% | -$27.00 |
| $6.25 | -55.7% | -$27.00 |
| $9.37 | -33.6% | -$27.00 |
| $12.49 | -11.5% | -$27.00 |
| $15.61 | +10.6% | -$27.00 |
| $18.74 | +32.7% | -$27.00 |
| $21.86 | +54.8% | -$27.00 |
| $24.98 | +76.9% | -$27.00 |
| $28.10 | +99.0% | -$27.00 |
When traders use butterfly on RUN
Butterflies on RUN are pinning bets - traders use them when they expect RUN 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.
RUN thesis for this butterfly
The market-implied 1-standard-deviation range for RUN extends from approximately $11.21 on the downside to $17.03 on the upside. A RUN long call butterfly is a pinning play: it pays maximum at the middle strike if RUN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RUN IV rank near 14.73% 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 RUN at 71.98%. As a Energy name, RUN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RUN-specific events.
RUN 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. RUN positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RUN alongside the broader basket even when RUN-specific fundamentals are unchanged. Always rebuild the position from current RUN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on RUN?
- A butterfly on RUN is the butterfly strategy applied to RUN (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 RUN stock trading near $14.12, the strikes shown on this page are snapped to the nearest listed RUN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RUN 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 RUN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 71.98%), the computed maximum profit is $67.59 per contract and the computed maximum loss is -$27.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RUN butterfly?
- The breakeven for the RUN butterfly priced on this page is roughly $13.27 and $14.73 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 RUN market-implied 1-standard-deviation expected move is approximately 20.64%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on RUN?
- Butterflies on RUN are pinning bets - traders use them when they expect RUN 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 RUN implied volatility affect this butterfly?
- RUN ATM IV is at 71.98% with IV rank near 14.73%, 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.