TE Butterfly Strategy
TE (T1 Energy Inc), in the Industrials sector, (Electrical Equipment & Parts industry), listed on NYSE.
T1 Energy Inc engages in the production and sale of battery cells for stationary energy storage, electric mobility, and marine applications in Europe and internationally. The company designs and manufactures lithium-ion based battery cell facilities. The company was founded in 2018 and is based in Luxembourg.
TE (T1 Energy Inc) trades in the Industrials sector, specifically Electrical Equipment & Parts, with a market capitalization of approximately $974.1M, a beta of 1.78 versus the broader market, a 52-week range of 0.93-9.78, average daily share volume of 16.0M, a public-listing history dating back to 2020, approximately 328 full-time employees. These structural characteristics shape how TE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.78 indicates TE 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 TE?
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 TE snapshot
As of May 15, 2026, spot at $5.76, ATM IV 122.49%, IV rank 22.96%, expected move 35.12%. The butterfly on TE 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 28-day expiry.
Why this butterfly structure on TE specifically: TE IV at 122.49% is on the cheap side of its 1-year range, which favors premium-buying structures like a TE butterfly, with a market-implied 1-standard-deviation move of approximately 35.12% (roughly $2.02 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TE expiries trade a higher absolute premium for lower per-day decay. Position sizing on TE should anchor to the underlying notional of $5.76 per share and to the trader's directional view on TE stock.
TE butterfly setup
The TE 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 TE near $5.76, the first option leg uses a $5.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TE chain at a 28-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 TE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.50 | $0.90 |
| Sell 2 | Call | $6.00 | $0.73 |
| Buy 1 | Call | $6.00 | $0.73 |
TE butterfly risk and reward
- Net Premium / Debit
- -$17.50
- Max Profit (per contract)
- $32.50
- Max Loss (per contract)
- -$17.50
- Breakeven(s)
- $5.68
- Risk / Reward Ratio
- 1.857
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.
TE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TE. 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 | -99.8% | -$17.50 |
| $1.28 | -77.7% | -$17.50 |
| $2.55 | -55.6% | -$17.50 |
| $3.83 | -33.6% | -$17.50 |
| $5.10 | -11.5% | -$17.50 |
| $6.37 | +10.6% | +$32.50 |
| $7.64 | +32.7% | +$32.50 |
| $8.92 | +54.8% | +$32.50 |
| $10.19 | +76.9% | +$32.50 |
| $11.46 | +99.0% | +$32.50 |
When traders use butterfly on TE
Butterflies on TE are pinning bets - traders use them when they expect TE 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.
TE thesis for this butterfly
The market-implied 1-standard-deviation range for TE extends from approximately $3.74 on the downside to $7.78 on the upside. A TE long call butterfly is a pinning play: it pays maximum at the middle strike if TE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TE IV rank near 22.96% 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 TE at 122.49%. As a Industrials name, TE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TE-specific events.
TE 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. TE positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TE alongside the broader basket even when TE-specific fundamentals are unchanged. Always rebuild the position from current TE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TE?
- A butterfly on TE is the butterfly strategy applied to TE (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 TE stock trading near $5.76, the strikes shown on this page are snapped to the nearest listed TE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TE 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 TE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 122.49%), the computed maximum profit is $32.50 per contract and the computed maximum loss is -$17.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TE butterfly?
- The breakeven for the TE butterfly priced on this page is roughly $5.68 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 TE market-implied 1-standard-deviation expected move is approximately 35.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TE?
- Butterflies on TE are pinning bets - traders use them when they expect TE 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 TE implied volatility affect this butterfly?
- TE ATM IV is at 122.49% with IV rank near 22.96%, 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.