SGI Butterfly Strategy
SGI (Somnigroup International Inc), in the Consumer Defensive sector, (Household & Personal Products industry), listed on NYSE.
Somni is a company specializing in sleep technology and wellness solutions, developing innovative products to enhance sleep quality. The company integrates science-backed methods, smart technology, and data-driven insights to improve sleep patterns and overall well-being.
SGI (Somnigroup International Inc) trades in the Consumer Defensive sector, specifically Household & Personal Products, with a market capitalization of approximately $13.46B, a trailing P/E of 25.81, a beta of 1.25 versus the broader market, a 52-week range of 62.46-98.56, average daily share volume of 2.9M, a public-listing history dating back to 2018, approximately 12K full-time employees. These structural characteristics shape how SGI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.25 places SGI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. SGI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on SGI?
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 SGI snapshot
As of May 15, 2026, spot at $62.60, ATM IV 43.10%, IV rank 6.61%, expected move 12.36%. The butterfly on SGI 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 SGI specifically: SGI IV at 43.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a SGI butterfly, with a market-implied 1-standard-deviation move of approximately 12.36% (roughly $7.74 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 SGI expiries trade a higher absolute premium for lower per-day decay. Position sizing on SGI should anchor to the underlying notional of $62.60 per share and to the trader's directional view on SGI stock.
SGI butterfly setup
The SGI 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 SGI near $62.60, the first option leg uses a $60.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SGI 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 SGI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $60.00 | $5.00 |
| Sell 2 | Call | $65.00 | $2.43 |
| Buy 1 | Call | $65.00 | $2.43 |
SGI butterfly risk and reward
- Net Premium / Debit
- -$257.50
- Max Profit (per contract)
- $242.50
- Max Loss (per contract)
- -$257.50
- Breakeven(s)
- $62.58
- Risk / Reward Ratio
- 0.942
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.
SGI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SGI. 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 | -100.0% | -$257.50 |
| $13.85 | -77.9% | -$257.50 |
| $27.69 | -55.8% | -$257.50 |
| $41.53 | -33.7% | -$257.50 |
| $55.37 | -11.5% | -$257.50 |
| $69.21 | +10.6% | +$242.50 |
| $83.05 | +32.7% | +$242.50 |
| $96.89 | +54.8% | +$242.50 |
| $110.73 | +76.9% | +$242.50 |
| $124.57 | +99.0% | +$242.50 |
When traders use butterfly on SGI
Butterflies on SGI are pinning bets - traders use them when they expect SGI 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.
SGI thesis for this butterfly
The market-implied 1-standard-deviation range for SGI extends from approximately $54.86 on the downside to $70.34 on the upside. A SGI long call butterfly is a pinning play: it pays maximum at the middle strike if SGI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SGI IV rank near 6.61% 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 SGI at 43.10%. As a Consumer Defensive name, SGI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SGI-specific events.
SGI 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. SGI positions also carry Consumer Defensive sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SGI alongside the broader basket even when SGI-specific fundamentals are unchanged. Always rebuild the position from current SGI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SGI?
- A butterfly on SGI is the butterfly strategy applied to SGI (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 SGI stock trading near $62.60, the strikes shown on this page are snapped to the nearest listed SGI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SGI 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 SGI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 43.10%), the computed maximum profit is $242.50 per contract and the computed maximum loss is -$257.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SGI butterfly?
- The breakeven for the SGI butterfly priced on this page is roughly $62.58 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 SGI market-implied 1-standard-deviation expected move is approximately 12.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SGI?
- Butterflies on SGI are pinning bets - traders use them when they expect SGI 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 SGI implied volatility affect this butterfly?
- SGI ATM IV is at 43.10% with IV rank near 6.61%, 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.