SRL Butterfly Strategy
SRL (Scully Royalty Ltd.), in the Financial Services sector, (Financial - Capital Markets industry), listed on NYSE.
Founded in 2017 and based in Central, Hong Kong, Scully Royalty Ltd. (SRL) primarily operates as an iron ore extraction business, maintaining a presence across the Americas, Africa, Canada, Asia, and Europe. The enterprise conducts its activities through three distinct divisions: Royalty, Industrial, and Merchant Banking. Significantly, SRL holds a royalty stake in the Scully iron ore mine, which is situated in Newfoundland and Labrador, Canada. Additionally, its operations encompass the manufacturing and medical supplies and services industries. The company was previously identified as MFC Bancorp Ltd. before officially rebranding to Scully Royalty Ltd. in June 2019.
SRL (Scully Royalty Ltd.) trades in the Financial Services sector, specifically Financial - Capital Markets, with a market capitalization of approximately $90.9M, a beta of 0.58 versus the broader market, a 52-week range of 4.21-10.39, average daily share volume of 14K, a public-listing history dating back to 1996, approximately 71 full-time employees. These structural characteristics shape how SRL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.58 indicates SRL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SRL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on SRL?
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.
SRL snapshot
As of August 14, 2026, spot at $5.88, ATM IV 121.50%, IV rank 24.84%, expected move 34.83%. The butterfly on SRL below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on SRL specifically: SRL IV at 121.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a SRL butterfly, with a market-implied 1-standard-deviation move of approximately 34.83% (roughly $2.05 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SRL expiries trade a higher absolute premium for lower per-day decay. Position sizing on SRL should anchor to the underlying notional of $5.88 per share and to the trader's directional view on SRL stock.
SRL butterfly setup
The SRL 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 SRL at $5.88 on that close, the first option leg uses a $5.59 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SRL chain at a 35-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 SRL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.59 | N/A |
| Sell 2 | Call | $5.88 | N/A |
| Buy 1 | Call | $6.17 | N/A |
SRL 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.
SRL butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SRL. 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 SRL
Butterflies on SRL are pinning bets - traders use them when they expect SRL 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.
SRL thesis for this butterfly
The market-implied 1-standard-deviation range for SRL extends from approximately $3.83 on the downside to $7.93 on the upside. A SRL long call butterfly is a pinning play: it pays maximum at the middle strike if SRL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SRL IV rank near 24.84% 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 SRL at 121.50%. As a Financial Services name, SRL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SRL-specific events.
SRL 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. SRL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SRL alongside the broader basket even when SRL-specific fundamentals are unchanged. Always rebuild the position from current SRL chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SRL?
- A butterfly on SRL is the butterfly strategy applied to SRL (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 SRL stock at $5.88 on the most recent close, the strikes shown on this page are snapped to the nearest listed SRL chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are SRL 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 SRL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 121.50%), 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 SRL butterfly?
- The breakeven for the SRL butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The SRL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 34.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SRL?
- Butterflies on SRL are pinning bets - traders use them when they expect SRL 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 SRL implied volatility affect this butterfly?
- SRL ATM IV is at 121.50% with IV rank near 24.84%, 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.