ST Butterfly Strategy
ST (Sensata Technologies Holding plc), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NYSE.
Sensata Technologies Holding plc develops, manufactures, and sells sensors, sensor-based solutions, controls, and other products in the Americas, Europe, Asia, and internationally. It operates in two segments, Performance Sensing and Sensing Solutions. The Performance Sensing segment develops and manufactures sensors, high-voltage contactors, and other solutions used in mission-critical systems and applications, such as tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain (engine/transmission), and exhaust management. This segment serves customers in the automotive, and heavy vehicle and off-road industries. The Sensing Solutions segment develops and manufactures application-specific sensor and electrical protection products primarily serving the industrial and aerospace markets. Its products include pressure and position sensors, motor and compressor protectors, high-voltage contactors, solid state relays, bimetal electromechanical controls, power inverters, charge controllers, battery management systems, operator controls, and Internet of Things solutions.
ST (Sensata Technologies Holding plc) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $7.01B, a trailing P/E of 144.83, a beta of 1.21 versus the broader market, a 52-week range of 24.69-49.36, average daily share volume of 2.0M, a public-listing history dating back to 2010, approximately 18K full-time employees. These structural characteristics shape how ST stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.21 places ST roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 144.83 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ST?
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 ST snapshot
As of May 15, 2026, spot at $48.56, ATM IV 43.00%, IV rank 44.33%, expected move 12.33%. The butterfly on ST 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 189-day expiry.
Why this butterfly structure on ST specifically: ST IV at 43.00% 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 12.33% (roughly $5.99 on the underlying). The 189-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ST expiries trade a higher absolute premium for lower per-day decay. Position sizing on ST should anchor to the underlying notional of $48.56 per share and to the trader's directional view on ST stock.
ST butterfly setup
The ST 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 ST near $48.56, the first option leg uses a $45.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ST chain at a 189-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 ST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $45.00 | $7.95 |
| Sell 2 | Call | $47.50 | $6.50 |
| Buy 1 | Call | $50.00 | $5.15 |
ST butterfly risk and reward
- Net Premium / Debit
- -$10.00
- Max Profit (per contract)
- $224.50
- Max Loss (per contract)
- -$10.00
- Breakeven(s)
- $45.03, $50.05
- Risk / Reward Ratio
- 22.450
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.
ST butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ST. 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% | -$10.00 |
| $10.75 | -77.9% | -$10.00 |
| $21.48 | -55.8% | -$10.00 |
| $32.22 | -33.7% | -$10.00 |
| $42.95 | -11.5% | -$10.00 |
| $53.69 | +10.6% | -$10.00 |
| $64.42 | +32.7% | -$10.00 |
| $75.16 | +54.8% | -$10.00 |
| $85.90 | +76.9% | -$10.00 |
| $96.63 | +99.0% | -$10.00 |
When traders use butterfly on ST
Butterflies on ST are pinning bets - traders use them when they expect ST 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.
ST thesis for this butterfly
The market-implied 1-standard-deviation range for ST extends from approximately $42.57 on the downside to $54.55 on the upside. A ST long call butterfly is a pinning play: it pays maximum at the middle strike if ST settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ST IV rank near 44.33% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on ST should anchor more to the directional view and the expected-move geometry. As a Technology name, ST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ST-specific events.
ST 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. ST positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ST alongside the broader basket even when ST-specific fundamentals are unchanged. Always rebuild the position from current ST chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ST?
- A butterfly on ST is the butterfly strategy applied to ST (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 ST stock trading near $48.56, the strikes shown on this page are snapped to the nearest listed ST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ST 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 ST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 43.00%), the computed maximum profit is $224.50 per contract and the computed maximum loss is -$10.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ST butterfly?
- The breakeven for the ST butterfly priced on this page is roughly $45.03 and $50.05 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 ST market-implied 1-standard-deviation expected move is approximately 12.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ST?
- Butterflies on ST are pinning bets - traders use them when they expect ST 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 ST implied volatility affect this butterfly?
- ST ATM IV is at 43.00% with IV rank near 44.33%, 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.