TELA Butterfly Strategy
TELA (TELA Bio, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
TELA Bio, Inc., a commercial-stage medical technology company, focuses on providing soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's anatomy. It provides a portfolio of OviTex Reinforced Tissue Matrix (OviTex) products for hernia repair and abdominal wall reconstruction; and OviTex PRS Reinforced Tissue Matrix products to address the unmet needs in plastic and reconstructive surgery, as well as OviTex for Laparoscopic and Robotic Procedures, a sterile reinforced tissue matrix derived from ovine rumen with polypropylene fiber intended to be used in laparoscopic and robotic-assisted hernia surgical repairs. The company markets its products through a single direct sales force, principally in the United States. TELA Bio, Inc. was incorporated in 2012 and is headquartered in Malvern, Pennsylvania.
TELA (TELA Bio, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $43.0M, a beta of 1.30 versus the broader market, a 52-week range of 0.501-2.2, average daily share volume of 184K, a public-listing history dating back to 2019, approximately 209 full-time employees. These structural characteristics shape how TELA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 places TELA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TELA?
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 TELA snapshot
As of May 15, 2026, spot at $0.90, ATM IV 17.50%, IV rank 0.00%, expected move 5.02%. The butterfly on TELA 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 TELA specifically: TELA IV at 17.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a TELA butterfly, with a market-implied 1-standard-deviation move of approximately 5.02% (roughly $0.05 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 TELA expiries trade a higher absolute premium for lower per-day decay. Position sizing on TELA should anchor to the underlying notional of $0.90 per share and to the trader's directional view on TELA stock.
TELA butterfly setup
The TELA 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 TELA near $0.90, the first option leg uses a $0.86 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TELA 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 TELA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $0.86 | N/A |
| Sell 2 | Call | $0.90 | N/A |
| Buy 1 | Call | $0.95 | N/A |
TELA 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.
TELA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TELA. 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 TELA
Butterflies on TELA are pinning bets - traders use them when they expect TELA 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.
TELA thesis for this butterfly
The market-implied 1-standard-deviation range for TELA extends from approximately $0.85 on the downside to $0.95 on the upside. A TELA long call butterfly is a pinning play: it pays maximum at the middle strike if TELA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TELA IV rank near 0.00% 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 TELA at 17.50%. As a Healthcare name, TELA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TELA-specific events.
TELA 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. TELA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TELA alongside the broader basket even when TELA-specific fundamentals are unchanged. Always rebuild the position from current TELA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TELA?
- A butterfly on TELA is the butterfly strategy applied to TELA (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 TELA stock trading near $0.90, the strikes shown on this page are snapped to the nearest listed TELA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TELA 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 TELA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 17.50%), 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 TELA butterfly?
- The breakeven for the TELA 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 TELA market-implied 1-standard-deviation expected move is approximately 5.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TELA?
- Butterflies on TELA are pinning bets - traders use them when they expect TELA 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 TELA implied volatility affect this butterfly?
- TELA ATM IV is at 17.50% with IV rank near 0.00%, 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.