SBRA Butterfly Strategy
SBRA (Sabra Health Care REIT, Inc.), in the Real Estate sector, (REIT - Healthcare Facilities industry), listed on NASDAQ.
As of March 31, 2022, Sabra's investment portfolio included 416 real estate properties held for investment. This consists of (i) 279 Skilled Nursing/Transitional Care facilities, (ii) 59 Senior Housing communities (Senior Housing - Leased), (iii) 50 Senior Housing communities operated by third-party property managers pursuant to property management agreements (Senior Housing - Managed), (iv) 13 Behavioral Health facilities and (v) 15 Specialty Hospitals and Other facilities), one asset held for sale, one investment in a sales-type lease, 16 investments in loans receivable (consisting of (i) two mortgage loans, (ii) one construction loan and (iii) 13 other loans), seven preferred equity investments and one investment in an unconsolidated joint venture. As of March 31, 2022, Sabra's real estate properties held for investment included 41,445 beds/units, spread across the United States and Canada.
SBRA (Sabra Health Care REIT, Inc.) trades in the Real Estate sector, specifically REIT - Healthcare Facilities, with a market capitalization of approximately $5.32B, a trailing P/E of 34.06, a beta of 0.65 versus the broader market, a 52-week range of 17.08-21.11, average daily share volume of 2.4M, a public-listing history dating back to 2002, approximately 50 full-time employees. These structural characteristics shape how SBRA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.65 indicates SBRA has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SBRA pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on SBRA?
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 SBRA snapshot
As of May 15, 2026, spot at $20.65, ATM IV 22.90%, IV rank 2.78%, expected move 6.57%. The butterfly on SBRA 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 SBRA specifically: SBRA IV at 22.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a SBRA butterfly, with a market-implied 1-standard-deviation move of approximately 6.57% (roughly $1.36 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 SBRA expiries trade a higher absolute premium for lower per-day decay. Position sizing on SBRA should anchor to the underlying notional of $20.65 per share and to the trader's directional view on SBRA stock.
SBRA butterfly setup
The SBRA 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 SBRA near $20.65, the first option leg uses a $19.62 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SBRA 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 SBRA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $19.62 | N/A |
| Sell 2 | Call | $20.65 | N/A |
| Buy 1 | Call | $21.68 | N/A |
SBRA 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.
SBRA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SBRA. 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 SBRA
Butterflies on SBRA are pinning bets - traders use them when they expect SBRA 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.
SBRA thesis for this butterfly
The market-implied 1-standard-deviation range for SBRA extends from approximately $19.29 on the downside to $22.01 on the upside. A SBRA long call butterfly is a pinning play: it pays maximum at the middle strike if SBRA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SBRA IV rank near 2.78% 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 SBRA at 22.90%. As a Real Estate name, SBRA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SBRA-specific events.
SBRA 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. SBRA positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SBRA alongside the broader basket even when SBRA-specific fundamentals are unchanged. Always rebuild the position from current SBRA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SBRA?
- A butterfly on SBRA is the butterfly strategy applied to SBRA (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 SBRA stock trading near $20.65, the strikes shown on this page are snapped to the nearest listed SBRA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SBRA 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 SBRA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.90%), 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 SBRA butterfly?
- The breakeven for the SBRA 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 SBRA market-implied 1-standard-deviation expected move is approximately 6.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SBRA?
- Butterflies on SBRA are pinning bets - traders use them when they expect SBRA 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 SBRA implied volatility affect this butterfly?
- SBRA ATM IV is at 22.90% with IV rank near 2.78%, 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.