SRRK Butterfly Strategy
SRRK (Scholar Rock Holding Corporation), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Scholar Rock Holding Corporation is a biopharmaceutical firm dedicated to discovering and advancing treatments for severe medical conditions by targeting the crucial role of protein growth factor signaling. Their lead therapeutic candidate, Apitegromab, an agent designed to inhibit the activation of latent myostatin, has successfully concluded Phase 3 clinical trials for spinal muscular atrophy (SMA). Another key program, SRK-181, is currently undergoing Phase 1 clinical assessment for tackling cancers that exhibit resistance to established checkpoint inhibitor treatments, including anti-PD-1 or anti-PD-L1 antibody therapies. Beyond these, the company cultivates a robust pipeline of innovative potential therapies, aiming to significantly improve the lives of individuals grappling with various severe ailments, such as neurological muscle conditions, malignancies, and fibrotic disorders. In a strategic partnership, Scholar Rock is collaborating with Gilead Sciences, Inc. to identify and develop targeted inhibitors of transforming growth factor beta (TGF-beta) activation, specifically for addressing fibrotic diseases. Established in 2012, Scholar Rock Holding Corporation operates from its headquarters in Cambridge, Massachusetts.
SRRK (Scholar Rock Holding Corporation) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $6.56B, a beta of 0.70 versus the broader market, a 52-week range of 27.07-55.19, average daily share volume of 1.5M, a public-listing history dating back to 2018, approximately 128 full-time employees. These structural characteristics shape how SRRK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.70 indicates SRRK has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on SRRK?
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 SRRK snapshot
As of June 30, 2026, spot at $54.89, ATM IV 57.10%, IV rank 12.80%, expected move 16.37%. The butterfly on SRRK 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 17-day expiry.
Why this butterfly structure on SRRK specifically: SRRK IV at 57.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a SRRK butterfly, with a market-implied 1-standard-deviation move of approximately 16.37% (roughly $8.99 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SRRK expiries trade a higher absolute premium for lower per-day decay. Position sizing on SRRK should anchor to the underlying notional of $54.89 per share and to the trader's directional view on SRRK stock.
SRRK butterfly setup
The SRRK 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 SRRK near $54.89, the first option leg uses a $52.15 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SRRK chain at a 17-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 SRRK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $52.15 | N/A |
| Sell 2 | Call | $54.89 | N/A |
| Buy 1 | Call | $57.63 | N/A |
SRRK 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.
SRRK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on SRRK. 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 SRRK
Butterflies on SRRK are pinning bets - traders use them when they expect SRRK 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.
SRRK thesis for this butterfly
The market-implied 1-standard-deviation range for SRRK extends from approximately $45.90 on the downside to $63.88 on the upside. A SRRK long call butterfly is a pinning play: it pays maximum at the middle strike if SRRK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SRRK IV rank near 12.80% 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 SRRK at 57.10%. As a Healthcare name, SRRK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SRRK-specific events.
SRRK 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. SRRK positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SRRK alongside the broader basket even when SRRK-specific fundamentals are unchanged. Always rebuild the position from current SRRK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on SRRK?
- A butterfly on SRRK is the butterfly strategy applied to SRRK (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 SRRK stock trading near $54.89, the strikes shown on this page are snapped to the nearest listed SRRK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SRRK 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 SRRK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 57.10%), 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 SRRK butterfly?
- The breakeven for the SRRK 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 SRRK market-implied 1-standard-deviation expected move is approximately 16.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on SRRK?
- Butterflies on SRRK are pinning bets - traders use them when they expect SRRK 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 SRRK implied volatility affect this butterfly?
- SRRK ATM IV is at 57.10% with IV rank near 12.80%, 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.