STZ Butterfly Strategy
STZ (Constellation Brands, Inc.), in the Consumer Defensive sector, (Beverages - Alcoholic industry), listed on NYSE.
Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company offers beer under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook’s California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson’s Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is based in Rochester, New York.
STZ (Constellation Brands, Inc.) trades in the Consumer Defensive sector, specifically Beverages - Alcoholic, with a market capitalization of approximately $22.88B, a trailing P/E of 12.64, a beta of 0.40 versus the broader market, a 52-week range of 126.45-171, average daily share volume of 2.2M, a public-listing history dating back to 1992, approximately 9K full-time employees. These structural characteristics shape how STZ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.40 indicates STZ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. STZ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on STZ?
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.
STZ snapshot
As of August 14, 2026, spot at $138.69, ATM IV 26.80%, IV rank 10.68%, expected move 7.68%. The butterfly on STZ below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this butterfly structure on STZ specifically: STZ IV at 26.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a STZ butterfly, with a market-implied 1-standard-deviation move of approximately 7.68% (roughly $10.66 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated STZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on STZ should anchor to the underlying notional of $138.69 per share and to the trader's directional view on STZ stock.
STZ butterfly setup
The STZ butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With STZ at $138.69 on that close, the first option leg uses a $132.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed STZ chain at a 28-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 STZ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $132.00 | $8.45 |
| Sell 2 | Call | $139.00 | $3.40 |
| Buy 1 | Call | $146.00 | $1.10 |
STZ butterfly risk and reward
- Net Premium / Debit
- -$275.00
- Max Profit (per contract)
- $385.81
- Max Loss (per contract)
- -$275.00
- Breakeven(s)
- $134.75, $143.25
- Risk / Reward Ratio
- 1.403
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.
STZ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on STZ. 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% | -$275.00 |
| $30.67 | -77.9% | -$275.00 |
| $61.34 | -55.8% | -$275.00 |
| $92.00 | -33.7% | -$275.00 |
| $122.67 | -11.6% | -$275.00 |
| $153.33 | +10.6% | -$275.00 |
| $183.99 | +32.7% | -$275.00 |
| $214.66 | +54.8% | -$275.00 |
| $245.32 | +76.9% | -$275.00 |
| $275.99 | +99.0% | -$275.00 |
When traders use butterfly on STZ
Butterflies on STZ are pinning bets - traders use them when they expect STZ 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.
STZ thesis for this butterfly
The market-implied 1-standard-deviation range for STZ extends from approximately $128.03 on the downside to $149.35 on the upside. A STZ long call butterfly is a pinning play: it pays maximum at the middle strike if STZ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current STZ IV rank near 10.68% 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 STZ at 26.80%. As a Consumer Defensive name, STZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to STZ-specific events.
STZ 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. STZ positions also carry Consumer Defensive sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move STZ alongside the broader basket even when STZ-specific fundamentals are unchanged. Always rebuild the position from current STZ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on STZ?
- A butterfly on STZ is the butterfly strategy applied to STZ (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 STZ stock at $138.69 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed STZ chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are STZ 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 STZ butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 26.80%), the computed maximum profit is $385.81 per contract and the computed maximum loss is -$275.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a STZ butterfly?
- The breakeven for the STZ butterfly priced on this page is roughly $134.75 and $143.25 at expiration, derived from the August 14, 2026 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 STZ market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on STZ?
- Butterflies on STZ are pinning bets - traders use them when they expect STZ 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 STZ implied volatility affect this butterfly?
- STZ ATM IV is at 26.80% with IV rank near 10.68%, 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.