TCMD Butterfly Strategy
TCMD (Tactile Systems Technology, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Tactile Systems Technology, Inc. is a medical technology firm that develops and supplies specialized devices to treat chronic health conditions across the United States. Its product portfolio features the Flexitouch Plus system, a pneumatic compression device designed for managing lymphedema. The company also offers the Entre system, a portable pneumatic compression solution for at-home treatment of various venous disorders, including lymphedema, chronic venous insufficiency, and venous leg ulcers. Additionally, Tactile Systems provides the AffloVest, a portable high-frequency chest wall oscillation device used to address retained pulmonary secretions associated with conditions such as bronchiectasis, cystic fibrosis, and certain neuromuscular disorders. Established in 1995, the company maintains its headquarters in Minneapolis, Minnesota.
TCMD (Tactile Systems Technology, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $683.0M, a trailing P/E of 33.66, a beta of 0.83 versus the broader market, a 52-week range of 9.415-37.77, average daily share volume of 301K, a public-listing history dating back to 2016, approximately 1K full-time employees. These structural characteristics shape how TCMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places TCMD roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TCMD?
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 TCMD snapshot
As of June 30, 2026, spot at $29.74, ATM IV 69.50%, IV rank 13.78%, expected move 19.93%. The butterfly on TCMD 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 TCMD specifically: TCMD IV at 69.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a TCMD butterfly, with a market-implied 1-standard-deviation move of approximately 19.93% (roughly $5.93 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 TCMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on TCMD should anchor to the underlying notional of $29.74 per share and to the trader's directional view on TCMD stock.
TCMD butterfly setup
The TCMD 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 TCMD near $29.74, the first option leg uses a $28.25 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TCMD 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 TCMD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.25 | N/A |
| Sell 2 | Call | $29.74 | N/A |
| Buy 1 | Call | $31.23 | N/A |
TCMD 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.
TCMD butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TCMD. 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 TCMD
Butterflies on TCMD are pinning bets - traders use them when they expect TCMD 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.
TCMD thesis for this butterfly
The market-implied 1-standard-deviation range for TCMD extends from approximately $23.81 on the downside to $35.67 on the upside. A TCMD long call butterfly is a pinning play: it pays maximum at the middle strike if TCMD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TCMD IV rank near 13.78% 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 TCMD at 69.50%. As a Healthcare name, TCMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TCMD-specific events.
TCMD 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. TCMD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TCMD alongside the broader basket even when TCMD-specific fundamentals are unchanged. Always rebuild the position from current TCMD chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TCMD?
- A butterfly on TCMD is the butterfly strategy applied to TCMD (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 TCMD stock trading near $29.74, the strikes shown on this page are snapped to the nearest listed TCMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TCMD 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 TCMD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 69.50%), 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 TCMD butterfly?
- The breakeven for the TCMD 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 TCMD market-implied 1-standard-deviation expected move is approximately 19.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TCMD?
- Butterflies on TCMD are pinning bets - traders use them when they expect TCMD 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 TCMD implied volatility affect this butterfly?
- TCMD ATM IV is at 69.50% with IV rank near 13.78%, 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.