TGEN Butterfly Strategy
TGEN (Tecogen Inc.), in the Industrials sector, (Electrical Equipment & Parts industry), listed on AMEX.
Tecogen Inc. designs, manufactures, markets, and maintains industrial and commercial cogeneration systems for residential, commercial, recreational, and industrial use in the United States and internationally. It operates through three segments: Products, Services, and Energy Production. The company offers InVerde e+ and TecoPower, a cogeneration product that supplies electricity and hot water; TECOCHILL air-conditioning and refrigeration chillers; Tecofrost gas engine-driven refrigeration compressors; and water heaters under the Ilios brand name, as well as emissions control technology under the Ultera brand name. It also provides long-term maintenance contracts, parts sales, and turnkey installation services through a network of eleven field service centers in California, the Midwest, the Northeast, and the Southeast, as well as in Ontario, Canada. In addition, the company installs, owns, operates, and maintains distributed generation of electricity, energy, and other complementary systems. It serves hospitals and nursing homes, colleges, universities, health clubs, spas, hotels, motels, office and retail buildings, food and beverage processors, multi-unit residential buildings, laundries, ice rinks, swimming pools, factories, municipal buildings, military installations, and indoor growing facilities.
TGEN (Tecogen Inc.) trades in the Industrials sector, specifically Electrical Equipment & Parts, with a market capitalization of approximately $151.6M, a beta of 2.05 versus the broader market, a 52-week range of 1.94-12.07, average daily share volume of 479K, a public-listing history dating back to 2014, approximately 91 full-time employees. These structural characteristics shape how TGEN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.05 indicates TGEN 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 TGEN?
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 TGEN snapshot
As of May 15, 2026, spot at $6.48, ATM IV 133.30%, IV rank 27.15%, expected move 38.22%. The butterfly on TGEN 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 TGEN specifically: TGEN IV at 133.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a TGEN butterfly, with a market-implied 1-standard-deviation move of approximately 38.22% (roughly $2.48 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 TGEN expiries trade a higher absolute premium for lower per-day decay. Position sizing on TGEN should anchor to the underlying notional of $6.48 per share and to the trader's directional view on TGEN stock.
TGEN butterfly setup
The TGEN 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 TGEN near $6.48, the first option leg uses a $6.16 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TGEN 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 TGEN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $6.16 | N/A |
| Sell 2 | Call | $6.48 | N/A |
| Buy 1 | Call | $6.80 | N/A |
TGEN 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.
TGEN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TGEN. 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 TGEN
Butterflies on TGEN are pinning bets - traders use them when they expect TGEN 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.
TGEN thesis for this butterfly
The market-implied 1-standard-deviation range for TGEN extends from approximately $4.00 on the downside to $8.96 on the upside. A TGEN long call butterfly is a pinning play: it pays maximum at the middle strike if TGEN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TGEN IV rank near 27.15% 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 TGEN at 133.30%. As a Industrials name, TGEN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TGEN-specific events.
TGEN 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. TGEN positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TGEN alongside the broader basket even when TGEN-specific fundamentals are unchanged. Always rebuild the position from current TGEN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TGEN?
- A butterfly on TGEN is the butterfly strategy applied to TGEN (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 TGEN stock trading near $6.48, the strikes shown on this page are snapped to the nearest listed TGEN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TGEN 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 TGEN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 133.30%), 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 TGEN butterfly?
- The breakeven for the TGEN 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 TGEN market-implied 1-standard-deviation expected move is approximately 38.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TGEN?
- Butterflies on TGEN are pinning bets - traders use them when they expect TGEN 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 TGEN implied volatility affect this butterfly?
- TGEN ATM IV is at 133.30% with IV rank near 27.15%, 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.