SDGR Butterfly Strategy
SDGR (Schrödinger, Inc.), in the Healthcare sector, (Medical - Healthcare Information Services industry), listed on NASDAQ.
Schrödinger, Inc., together with its subsidiaries, provides physics-based software platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on selling its software for drug discovery in the life sciences industry, as well as to customers in materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.
SDGR (Schrödinger, Inc.) trades in the Healthcare sector, specifically Medical - Healthcare Information Services, with a market capitalization of approximately $952.7M, a beta of 1.58 versus the broader market, a 52-week range of 10.945-27.63, average daily share volume of 1.4M, a public-listing history dating back to 2020, approximately 891 full-time employees. These structural characteristics shape how SDGR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.58 indicates SDGR has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a butterfly on SDGR?
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 SDGR snapshot
As of May 15, 2026, spot at $11.95, ATM IV 77.20%, IV rank 57.13%, expected move 22.13%. The butterfly on SDGR 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 SDGR specifically: SDGR IV at 77.20% 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 22.13% (roughly $2.64 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 SDGR expiries trade a higher absolute premium for lower per-day decay. Position sizing on SDGR should anchor to the underlying notional of $11.95 per share and to the trader's directional view on SDGR stock.
SDGR butterfly setup
The SDGR 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 SDGR near $11.95, the first option leg uses a $11.35 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SDGR 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 SDGR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $11.35 | N/A |
| Sell 2 | Call | $11.95 | N/A |
| Buy 1 | Call | $12.55 | N/A |
SDGR 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.
SDGR butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SDGR. 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 SDGR
Butterflies on SDGR are pinning bets - traders use them when they expect SDGR 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.
SDGR thesis for this butterfly
The market-implied 1-standard-deviation range for SDGR extends from approximately $9.31 on the downside to $14.59 on the upside. A SDGR long call butterfly is a pinning play: it pays maximum at the middle strike if SDGR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SDGR IV rank near 57.13% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on SDGR should anchor more to the directional view and the expected-move geometry. As a Healthcare name, SDGR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SDGR-specific events.
SDGR 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. SDGR positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SDGR alongside the broader basket even when SDGR-specific fundamentals are unchanged. Always rebuild the position from current SDGR chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SDGR?
- A butterfly on SDGR is the butterfly strategy applied to SDGR (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 SDGR stock trading near $11.95, the strikes shown on this page are snapped to the nearest listed SDGR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SDGR 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 SDGR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 77.20%), 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 SDGR butterfly?
- The breakeven for the SDGR 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 SDGR market-implied 1-standard-deviation expected move is approximately 22.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SDGR?
- Butterflies on SDGR are pinning bets - traders use them when they expect SDGR 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 SDGR implied volatility affect this butterfly?
- SDGR ATM IV is at 77.20% with IV rank near 57.13%, 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.