TCBK Butterfly Strategy
TCBK (TriCo Bancshares), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
TriCo Bancshares operates as a bank holding company for Tri Counties Bank that provides commercial banking services to individual and corporate customers. The company accepts demand, savings, and time deposits. It also provides small business loans; real estate mortgage loans, such as residential and commercial loans; consumer loans; commercial loans, including agricultural loans; and real estate construction loans. In addition, the company offers treasury management services; and other customary banking services, including safe deposit boxes; and independent financial and broker-dealer services. It operates 61 traditional branches, 7 in-store branches, and 7 loan production offices in 31 counties throughout California. The company was founded in 1975 and is headquartered in Chico, California.
TCBK (TriCo Bancshares) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $1.58B, a trailing P/E of 12.31, a beta of 0.62 versus the broader market, a 52-week range of 36.32-53.18, average daily share volume of 147K, a public-listing history dating back to 1993, approximately 1K full-time employees. These structural characteristics shape how TCBK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.62 indicates TCBK has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TCBK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TCBK?
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 TCBK snapshot
As of May 15, 2026, spot at $48.85, ATM IV 48.60%, IV rank 13.45%, expected move 13.93%. The butterfly on TCBK 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 34-day expiry.
Why this butterfly structure on TCBK specifically: TCBK IV at 48.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a TCBK butterfly, with a market-implied 1-standard-deviation move of approximately 13.93% (roughly $6.81 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TCBK expiries trade a higher absolute premium for lower per-day decay. Position sizing on TCBK should anchor to the underlying notional of $48.85 per share and to the trader's directional view on TCBK stock.
TCBK butterfly setup
The TCBK 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 TCBK near $48.85, the first option leg uses a $46.41 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TCBK chain at a 34-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 TCBK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $46.41 | N/A |
| Sell 2 | Call | $48.85 | N/A |
| Buy 1 | Call | $51.29 | N/A |
TCBK 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.
TCBK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TCBK. 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 TCBK
Butterflies on TCBK are pinning bets - traders use them when they expect TCBK 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.
TCBK thesis for this butterfly
The market-implied 1-standard-deviation range for TCBK extends from approximately $42.04 on the downside to $55.66 on the upside. A TCBK long call butterfly is a pinning play: it pays maximum at the middle strike if TCBK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TCBK IV rank near 13.45% 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 TCBK at 48.60%. As a Financial Services name, TCBK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TCBK-specific events.
TCBK 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. TCBK positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TCBK alongside the broader basket even when TCBK-specific fundamentals are unchanged. Always rebuild the position from current TCBK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TCBK?
- A butterfly on TCBK is the butterfly strategy applied to TCBK (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 TCBK stock trading near $48.85, the strikes shown on this page are snapped to the nearest listed TCBK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TCBK 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 TCBK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 48.60%), 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 TCBK butterfly?
- The breakeven for the TCBK 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 TCBK market-implied 1-standard-deviation expected move is approximately 13.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TCBK?
- Butterflies on TCBK are pinning bets - traders use them when they expect TCBK 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 TCBK implied volatility affect this butterfly?
- TCBK ATM IV is at 48.60% with IV rank near 13.45%, 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.