TDW Butterfly Strategy
TDW (Tidewater Inc.), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NYSE.
Tidewater Inc., together with its subsidiaries, provides offshore marine support and transportation services to the offshore energy industry through the operation of a fleet of marine service vessels worldwide. It provides services in support of offshore oil and natural gas exploration, field development, and production, as well as windfarm development and maintenance, including towing of and anchor handling for mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover, and production activities; offshore construction, and seismic and subsea support; geotechnical survey support for windfarm construction; and various specialized services, such as pipe and cable laying. The company operates and charters deepwater vessels, including platform supply and horsepower anchor handling tug supply vessels for use in transporting supplies and equipment from shore bases to deepwater and intermediate water depth offshore drilling rigs and production platforms; towing-supply vessels for use in intermediate and shallow waters; and crew boats, utility vessels, and offshore tugs to transport personnel and supplies from shore bases to offshore drilling rigs, platforms, and other installations. It also operates offshore tugs for use in tow floating drilling rigs and barges; and assisting in the docking of tankers, as well as in pipe and cable laying, and construction barges. The company serves oil and natural gas exploration, field development, and production companies; mid-sized and smaller independent exploration and production companies; foreign government-owned or government-controlled organizations, and other related companies; drilling contractors; and other companies, such as offshore construction, windfarm development, diving, and well stimulation companies. As of December 31, 2021, it owned 135 vessels.
TDW (Tidewater Inc.) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $4.03B, a trailing P/E of 13.49, a beta of 0.57 versus the broader market, a 52-week range of 38.24-93.13, average daily share volume of 891K, a public-listing history dating back to 1980, approximately 8K full-time employees. These structural characteristics shape how TDW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.57 indicates TDW has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a butterfly on TDW?
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 TDW snapshot
As of May 15, 2026, spot at $82.07, ATM IV 49.80%, IV rank 27.43%, expected move 14.28%. The butterfly on TDW 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 63-day expiry.
Why this butterfly structure on TDW specifically: TDW IV at 49.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a TDW butterfly, with a market-implied 1-standard-deviation move of approximately 14.28% (roughly $11.72 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TDW expiries trade a higher absolute premium for lower per-day decay. Position sizing on TDW should anchor to the underlying notional of $82.07 per share and to the trader's directional view on TDW stock.
TDW butterfly setup
The TDW 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 TDW near $82.07, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TDW chain at a 63-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 TDW shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $7.85 |
| Sell 2 | Call | $80.00 | $7.85 |
| Buy 1 | Call | $85.00 | $5.55 |
TDW butterfly risk and reward
- Net Premium / Debit
- +$230.00
- Max Profit (per contract)
- $230.00
- Max Loss (per contract)
- -$270.00
- Breakeven(s)
- $82.30
- Risk / Reward Ratio
- 0.852
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.
TDW butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TDW. 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% | +$230.00 |
| $18.16 | -77.9% | +$230.00 |
| $36.30 | -55.8% | +$230.00 |
| $54.45 | -33.7% | +$230.00 |
| $72.59 | -11.6% | +$230.00 |
| $90.74 | +10.6% | -$270.00 |
| $108.88 | +32.7% | -$270.00 |
| $127.03 | +54.8% | -$270.00 |
| $145.17 | +76.9% | -$270.00 |
| $163.32 | +99.0% | -$270.00 |
When traders use butterfly on TDW
Butterflies on TDW are pinning bets - traders use them when they expect TDW 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.
TDW thesis for this butterfly
The market-implied 1-standard-deviation range for TDW extends from approximately $70.35 on the downside to $93.79 on the upside. A TDW long call butterfly is a pinning play: it pays maximum at the middle strike if TDW settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TDW IV rank near 27.43% 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 TDW at 49.80%. As a Energy name, TDW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TDW-specific events.
TDW 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. TDW positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TDW alongside the broader basket even when TDW-specific fundamentals are unchanged. Always rebuild the position from current TDW chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TDW?
- A butterfly on TDW is the butterfly strategy applied to TDW (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 TDW stock trading near $82.07, the strikes shown on this page are snapped to the nearest listed TDW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TDW 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 TDW butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 49.80%), the computed maximum profit is $230.00 per contract and the computed maximum loss is -$270.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TDW butterfly?
- The breakeven for the TDW butterfly priced on this page is roughly $82.30 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 TDW market-implied 1-standard-deviation expected move is approximately 14.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TDW?
- Butterflies on TDW are pinning bets - traders use them when they expect TDW 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 TDW implied volatility affect this butterfly?
- TDW ATM IV is at 49.80% with IV rank near 27.43%, 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.