TLS Butterfly Strategy
TLS (Telos Corporation), in the Technology sector, (Information Technology Services industry), listed on NASDAQ.
Telos Corporation, together with its subsidiaries, provides information technology (IT) solutions and services worldwide. It provides Xacta, a premier platform for enterprise cyber risk management and security compliance automation solutions to large commercial and government enterprises; and Telos Ghost, a solution to eliminate cyber-attack surfaces by obfuscating and encrypting data, masking user identity and location, and hiding network resources, as well as provides security and privacy for intelligence gathering, cyber threat protection, securing critical infrastructure, and protecting communications and applications. The company also offers Telos Automated Message Handling System, a web-based organizational message distribution and management platform for mission-critical communications used by military field operatives; and Telos ID that provides identity trust and digital services through IDTrust360, an enterprise-class digital identity risk platform for extending cloud identity services for mobile and enterprise and custom digital identity services that reduces threats through the integration of advanced technologies that fuse biometrics, credentials, and other identity-centric data used for continuously monitor trust. In addition, it provides secure network services, including secure mobility solutions for business and government that enable remote work and minimize operational and security concern across and beyond the enterprises; and network management and defense services for operating, administrating, and defending complex enterprise networks and defensive cyber operations. It serves to the United States federal government, large commercial businesses, state and local governments, and international customers. The company was founded in 1968 and is headquartered in Ashburn, Virginia.
TLS (Telos Corporation) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $312.7M, a beta of 0.94 versus the broader market, a 52-week range of 2.37-8.36, average daily share volume of 755K, a public-listing history dating back to 2020, approximately 504 full-time employees. These structural characteristics shape how TLS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.94 places TLS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TLS?
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 TLS snapshot
As of May 15, 2026, spot at $4.21, ATM IV 68.70%, IV rank 10.53%, expected move 19.70%. The butterfly on TLS 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 TLS specifically: TLS IV at 68.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a TLS butterfly, with a market-implied 1-standard-deviation move of approximately 19.70% (roughly $0.83 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 TLS expiries trade a higher absolute premium for lower per-day decay. Position sizing on TLS should anchor to the underlying notional of $4.21 per share and to the trader's directional view on TLS stock.
TLS butterfly setup
The TLS 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 TLS near $4.21, the first option leg uses a $4.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TLS 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 TLS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $4.00 | N/A |
| Sell 2 | Call | $4.21 | N/A |
| Buy 1 | Call | $4.42 | N/A |
TLS 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.
TLS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TLS. 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 TLS
Butterflies on TLS are pinning bets - traders use them when they expect TLS 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.
TLS thesis for this butterfly
The market-implied 1-standard-deviation range for TLS extends from approximately $3.38 on the downside to $5.04 on the upside. A TLS long call butterfly is a pinning play: it pays maximum at the middle strike if TLS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TLS IV rank near 10.53% 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 TLS at 68.70%. As a Technology name, TLS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TLS-specific events.
TLS 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. TLS positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TLS alongside the broader basket even when TLS-specific fundamentals are unchanged. Always rebuild the position from current TLS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TLS?
- A butterfly on TLS is the butterfly strategy applied to TLS (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 TLS stock trading near $4.21, the strikes shown on this page are snapped to the nearest listed TLS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TLS 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 TLS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 68.70%), 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 TLS butterfly?
- The breakeven for the TLS 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 TLS market-implied 1-standard-deviation expected move is approximately 19.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TLS?
- Butterflies on TLS are pinning bets - traders use them when they expect TLS 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 TLS implied volatility affect this butterfly?
- TLS ATM IV is at 68.70% with IV rank near 10.53%, 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.