TMQ Butterfly Strategy
TMQ (Trilogy Metals Inc.), in the Basic Materials sector, (Industrial Materials industry), listed on AMEX.
Trilogy Metals Inc., a base metals exploration company, explores for and develops mineral properties in the United States. It principally holds interests in the Upper Kobuk mineral projects that include the Arctic, which contains polymetallic volcanogenic massive sulfide deposits; and Bornite that contains carbonate-hosted copper - cobalt deposits covering an area of approximately 426,690 acres located in the Ambler mining district in Northwest Alaska. The company was formerly known as NovaCopper Inc. and changed its name to Trilogy Metals Inc. in September 2016. Trilogy Metals Inc. was founded in 2004 and is headquartered in Vancouver, Canada.
TMQ (Trilogy Metals Inc.) trades in the Basic Materials sector, specifically Industrial Materials, with a market capitalization of approximately $802.3M, a beta of 1.65 versus the broader market, a 52-week range of 1.13-11.29, average daily share volume of 3.3M, a public-listing history dating back to 2012, approximately 5 full-time employees. These structural characteristics shape how TMQ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.65 indicates TMQ 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 TMQ?
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 TMQ snapshot
As of May 15, 2026, spot at $4.13, ATM IV 87.50%, IV rank 25.69%, expected move 25.09%. The butterfly on TMQ 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 TMQ specifically: TMQ IV at 87.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a TMQ butterfly, with a market-implied 1-standard-deviation move of approximately 25.09% (roughly $1.04 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 TMQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMQ should anchor to the underlying notional of $4.13 per share and to the trader's directional view on TMQ stock.
TMQ butterfly setup
The TMQ 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 TMQ near $4.13, the first option leg uses a $3.92 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMQ 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 TMQ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.92 | N/A |
| Sell 2 | Call | $4.13 | N/A |
| Buy 1 | Call | $4.34 | N/A |
TMQ 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.
TMQ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TMQ. 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 TMQ
Butterflies on TMQ are pinning bets - traders use them when they expect TMQ 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.
TMQ thesis for this butterfly
The market-implied 1-standard-deviation range for TMQ extends from approximately $3.09 on the downside to $5.17 on the upside. A TMQ long call butterfly is a pinning play: it pays maximum at the middle strike if TMQ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TMQ IV rank near 25.69% 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 TMQ at 87.50%. As a Basic Materials name, TMQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMQ-specific events.
TMQ 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. TMQ positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TMQ alongside the broader basket even when TMQ-specific fundamentals are unchanged. Always rebuild the position from current TMQ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TMQ?
- A butterfly on TMQ is the butterfly strategy applied to TMQ (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 TMQ stock trading near $4.13, the strikes shown on this page are snapped to the nearest listed TMQ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TMQ 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 TMQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 87.50%), 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 TMQ butterfly?
- The breakeven for the TMQ 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 TMQ market-implied 1-standard-deviation expected move is approximately 25.09%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TMQ?
- Butterflies on TMQ are pinning bets - traders use them when they expect TMQ 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 TMQ implied volatility affect this butterfly?
- TMQ ATM IV is at 87.50% with IV rank near 25.69%, 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.