TARA Butterfly Strategy
TARA (Protara Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Protara Therapeutics, Inc. is a biotechnology company actively involved in clinical research and development, striving to identify and advance groundbreaking therapies. Their core mission is to tackle significant medical challenges in both oncology and rare disease domains. The company's leading therapeutic candidate, TARA-002, is an investigational cellular therapy currently under evaluation for the treatment of lymphatic malformations. Furthermore, Protara is developing intravenous choline chloride, a potential phospholipid substrate replacement therapy aimed at addressing liver disease associated with intestinal failure. The organization, which was formerly known as ArTara Therapeutics, Inc., underwent a name change to Protara Therapeutics, Inc. in May 2020. Its principal operations are based in New York, New York.
TARA (Protara Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $159.0M, a beta of 1.45 versus the broader market, a 52-week range of 2.77-7.82, average daily share volume of 663K, a public-listing history dating back to 2014, approximately 28 full-time employees. These structural characteristics shape how TARA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.45 indicates TARA 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 TARA?
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 TARA snapshot
As of June 30, 2026, spot at $3.83, ATM IV 22.00%, IV rank 0.36%, expected move 6.31%. The butterfly on TARA 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 TARA specifically: TARA IV at 22.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a TARA butterfly, with a market-implied 1-standard-deviation move of approximately 6.31% (roughly $0.24 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 TARA expiries trade a higher absolute premium for lower per-day decay. Position sizing on TARA should anchor to the underlying notional of $3.83 per share and to the trader's directional view on TARA stock.
TARA butterfly setup
The TARA 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 TARA near $3.83, the first option leg uses a $3.64 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TARA 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 TARA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.64 | N/A |
| Sell 2 | Call | $3.83 | N/A |
| Buy 1 | Call | $4.02 | N/A |
TARA 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.
TARA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TARA. 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 TARA
Butterflies on TARA are pinning bets - traders use them when they expect TARA 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.
TARA thesis for this butterfly
The market-implied 1-standard-deviation range for TARA extends from approximately $3.59 on the downside to $4.07 on the upside. A TARA long call butterfly is a pinning play: it pays maximum at the middle strike if TARA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TARA IV rank near 0.36% 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 TARA at 22.00%. As a Healthcare name, TARA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TARA-specific events.
TARA 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. TARA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TARA alongside the broader basket even when TARA-specific fundamentals are unchanged. Always rebuild the position from current TARA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TARA?
- A butterfly on TARA is the butterfly strategy applied to TARA (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 TARA stock trading near $3.83, the strikes shown on this page are snapped to the nearest listed TARA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TARA 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 TARA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.00%), 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 TARA butterfly?
- The breakeven for the TARA 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 TARA market-implied 1-standard-deviation expected move is approximately 6.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TARA?
- Butterflies on TARA are pinning bets - traders use them when they expect TARA 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 TARA implied volatility affect this butterfly?
- TARA ATM IV is at 22.00% with IV rank near 0.36%, 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.