TRC Butterfly Strategy
TRC (Tejon Ranch Co.), in the Industrials sector, (Conglomerates industry), listed on NYSE.
Tejon Ranch Co., together with its subsidiaries, operates as a diversified real estate development and agribusiness company. It operates through five segments: Commercial/Industrial Real Estate Development, Resort/Residential Real Estate Development, Mineral Resources, Farming, and Ranch Operations. The Commercial/Industrial Real Estate Development segment engages in the planning and permitting of land for development; construction of infrastructure projects, pre-leased buildings, and buildings to be leased or sold; and sale of land to third parties for their own development. It is also involved in the activities related to communications leases, and landscape maintenance. This segment leases land to two auto service stations with convenience stores, 13 fast-food operations, a motel, an antique shop, and a post office; various microwave repeater locations, radio and cellular transmitter sites, and fiber optic cable routes; and 32 acres of land for an electric power plant. The Resort/Residential Real Estate Development segment engages in land entitlement, planning, pre-construction engineering, stewardship, and conservation activities.
TRC (Tejon Ranch Co.) trades in the Industrials sector, specifically Conglomerates, with a market capitalization of approximately $520.9M, a trailing P/E of 308.16, a beta of 0.61 versus the broader market, a 52-week range of 15.31-21.31, average daily share volume of 104K, a public-listing history dating back to 1980, approximately 82 full-time employees. These structural characteristics shape how TRC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.61 indicates TRC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 308.16 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on TRC?
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 TRC snapshot
As of May 15, 2026, spot at $19.08, ATM IV 68.70%, IV rank 28.73%, expected move 19.70%. The butterfly on TRC 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 TRC specifically: TRC IV at 68.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a TRC butterfly, with a market-implied 1-standard-deviation move of approximately 19.70% (roughly $3.76 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 TRC expiries trade a higher absolute premium for lower per-day decay. Position sizing on TRC should anchor to the underlying notional of $19.08 per share and to the trader's directional view on TRC stock.
TRC butterfly setup
The TRC 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 TRC near $19.08, the first option leg uses a $18.13 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TRC 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 TRC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $18.13 | N/A |
| Sell 2 | Call | $19.08 | N/A |
| Buy 1 | Call | $20.03 | N/A |
TRC 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.
TRC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TRC. 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 TRC
Butterflies on TRC are pinning bets - traders use them when they expect TRC 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.
TRC thesis for this butterfly
The market-implied 1-standard-deviation range for TRC extends from approximately $15.32 on the downside to $22.84 on the upside. A TRC long call butterfly is a pinning play: it pays maximum at the middle strike if TRC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TRC IV rank near 28.73% 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 TRC at 68.70%. As a Industrials name, TRC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TRC-specific events.
TRC 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. TRC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TRC alongside the broader basket even when TRC-specific fundamentals are unchanged. Always rebuild the position from current TRC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TRC?
- A butterfly on TRC is the butterfly strategy applied to TRC (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 TRC stock trading near $19.08, the strikes shown on this page are snapped to the nearest listed TRC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TRC 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 TRC 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 TRC butterfly?
- The breakeven for the TRC 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 TRC 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 TRC?
- Butterflies on TRC are pinning bets - traders use them when they expect TRC 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 TRC implied volatility affect this butterfly?
- TRC ATM IV is at 68.70% with IV rank near 28.73%, 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.