SLAB Butterfly Strategy
SLAB (Silicon Laboratories Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Silicon Laboratories Inc., a fabless semiconductor company, provides various analog-intensive mixed-signal solutions in the United States, China, and internationally. The company's products include wireless microcontrollers and sensor products. Its products are used in various electronic products in a range of applications for the Internet of Things (IoT), including connected home and security, industrial automation and control, smart metering, smart lighting, commercial building automation, consumer electronics, asset tracking, and medical instrumentation. The company sells its products through its direct sales force, as well as through a network of independent sales representatives and distributors. Silicon Laboratories Inc. was founded in 1996 and is headquartered in Austin, Texas.
SLAB (Silicon Laboratories Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $7.16B, a beta of 1.40 versus the broader market, a 52-week range of 115.51-218.68, average daily share volume of 513K, a public-listing history dating back to 2000, approximately 2K full-time employees. These structural characteristics shape how SLAB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.40 indicates SLAB 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 SLAB?
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 SLAB snapshot
As of May 15, 2026, spot at $216.30, ATM IV 8.50%, IV rank 1.74%, expected move 2.44%. The butterfly on SLAB 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 SLAB specifically: SLAB IV at 8.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a SLAB butterfly, with a market-implied 1-standard-deviation move of approximately 2.44% (roughly $5.27 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 SLAB expiries trade a higher absolute premium for lower per-day decay. Position sizing on SLAB should anchor to the underlying notional of $216.30 per share and to the trader's directional view on SLAB stock.
SLAB butterfly setup
The SLAB 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 SLAB near $216.30, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SLAB 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 SLAB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $210.00 | $8.00 |
| Sell 2 | Call | $220.00 | $2.15 |
| Buy 1 | Call | $230.00 | $0.25 |
SLAB butterfly risk and reward
- Net Premium / Debit
- -$395.00
- Max Profit (per contract)
- $561.57
- Max Loss (per contract)
- -$395.00
- Breakeven(s)
- $213.95, $226.05
- Risk / Reward Ratio
- 1.422
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.
SLAB butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SLAB. 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% | -$395.00 |
| $47.83 | -77.9% | -$395.00 |
| $95.66 | -55.8% | -$395.00 |
| $143.48 | -33.7% | -$395.00 |
| $191.31 | -11.6% | -$395.00 |
| $239.13 | +10.6% | -$395.00 |
| $286.95 | +32.7% | -$395.00 |
| $334.78 | +54.8% | -$395.00 |
| $382.60 | +76.9% | -$395.00 |
| $430.43 | +99.0% | -$395.00 |
When traders use butterfly on SLAB
Butterflies on SLAB are pinning bets - traders use them when they expect SLAB 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.
SLAB thesis for this butterfly
The market-implied 1-standard-deviation range for SLAB extends from approximately $211.03 on the downside to $221.57 on the upside. A SLAB long call butterfly is a pinning play: it pays maximum at the middle strike if SLAB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SLAB IV rank near 1.74% 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 SLAB at 8.50%. As a Technology name, SLAB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SLAB-specific events.
SLAB 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. SLAB positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SLAB alongside the broader basket even when SLAB-specific fundamentals are unchanged. Always rebuild the position from current SLAB chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SLAB?
- A butterfly on SLAB is the butterfly strategy applied to SLAB (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 SLAB stock trading near $216.30, the strikes shown on this page are snapped to the nearest listed SLAB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SLAB 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 SLAB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 8.50%), the computed maximum profit is $561.57 per contract and the computed maximum loss is -$395.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SLAB butterfly?
- The breakeven for the SLAB butterfly priced on this page is roughly $213.95 and $226.05 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 SLAB market-implied 1-standard-deviation expected move is approximately 2.44%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SLAB?
- Butterflies on SLAB are pinning bets - traders use them when they expect SLAB 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 SLAB implied volatility affect this butterfly?
- SLAB ATM IV is at 8.50% with IV rank near 1.74%, 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.