TDY Butterfly Strategy
TDY (Teledyne Technologies Incorporated), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NYSE.
Teledyne Technologies Incorporated provides enabling technologies for industrial growth markets in the United States, Canada, the United Kingdom, Belgium, the Netherlands, and internationally. The company's Instrumentation segment offers monitoring and control instruments for marine, environmental, industrial, and other applications, as well as electronic test and measurement equipment; and power and communications connectivity devices for distributed instrumentation systems and sensor networks. Its Digital Imaging segment provides visible spectrum sensors and digital cameras for industrial machine vision and automated quality control, as well as for medical, research, and scientific applications; and infrared and X-ray spectra for use in industrial, government, and medical applications, as well as micro electromechanical systems and semiconductors, including analog-to-digital and digital-to-analog converters. This segment also offers thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems, and threat-detection solutions. The company's Aerospace and Defense Electronics segment provides electronic components and subsystems, as well as communications products, such as defense electronics, environment interconnects, data acquisition and communications equipment for aircraft, components and subsystems for wireless and satellite communications, and general aviation batteries. Its Engineered Systems segment offers systems engineering and integration, technology development, and manufacturing solutions for defense, space, environmental, and energy applications; and designs and manufactures electrochemical energy systems and electronics for military applications.
TDY (Teledyne Technologies Incorporated) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $29.46B, a trailing P/E of 31.90, a beta of 0.97 versus the broader market, a 52-week range of 483.02-693.38, average daily share volume of 319K, a public-listing history dating back to 1999, approximately 15K full-time employees. These structural characteristics shape how TDY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.97 places TDY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TDY?
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 TDY snapshot
As of May 15, 2026, spot at $616.85, ATM IV 27.10%, IV rank 49.09%, expected move 7.77%. The butterfly on TDY 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 TDY specifically: TDY IV at 27.10% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 7.77% (roughly $47.93 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 TDY expiries trade a higher absolute premium for lower per-day decay. Position sizing on TDY should anchor to the underlying notional of $616.85 per share and to the trader's directional view on TDY stock.
TDY butterfly setup
The TDY 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 TDY near $616.85, the first option leg uses a $590.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TDY 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 TDY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $590.00 | $40.75 |
| Sell 2 | Call | $620.00 | $21.35 |
| Buy 1 | Call | $650.00 | $9.65 |
TDY butterfly risk and reward
- Net Premium / Debit
- -$770.00
- Max Profit (per contract)
- $2,225.47
- Max Loss (per contract)
- -$770.00
- Breakeven(s)
- $597.70, $642.30
- Risk / Reward Ratio
- 2.890
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.
TDY butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TDY. 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% | -$770.00 |
| $136.40 | -77.9% | -$770.00 |
| $272.79 | -55.8% | -$770.00 |
| $409.17 | -33.7% | -$770.00 |
| $545.56 | -11.6% | -$770.00 |
| $681.95 | +10.6% | -$770.00 |
| $818.34 | +32.7% | -$770.00 |
| $954.72 | +54.8% | -$770.00 |
| $1,091.11 | +76.9% | -$770.00 |
| $1,227.50 | +99.0% | -$770.00 |
When traders use butterfly on TDY
Butterflies on TDY are pinning bets - traders use them when they expect TDY 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.
TDY thesis for this butterfly
The market-implied 1-standard-deviation range for TDY extends from approximately $568.92 on the downside to $664.78 on the upside. A TDY long call butterfly is a pinning play: it pays maximum at the middle strike if TDY settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TDY IV rank near 49.09% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on TDY should anchor more to the directional view and the expected-move geometry. As a Technology name, TDY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TDY-specific events.
TDY 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. TDY positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TDY alongside the broader basket even when TDY-specific fundamentals are unchanged. Always rebuild the position from current TDY chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TDY?
- A butterfly on TDY is the butterfly strategy applied to TDY (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 TDY stock trading near $616.85, the strikes shown on this page are snapped to the nearest listed TDY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TDY 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 TDY butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.10%), the computed maximum profit is $2,225.47 per contract and the computed maximum loss is -$770.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TDY butterfly?
- The breakeven for the TDY butterfly priced on this page is roughly $597.70 and $642.30 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 TDY market-implied 1-standard-deviation expected move is approximately 7.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TDY?
- Butterflies on TDY are pinning bets - traders use them when they expect TDY 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 TDY implied volatility affect this butterfly?
- TDY ATM IV is at 27.10% with IV rank near 49.09%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.