TRVI Butterfly Strategy
TRVI (Trevi Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Trevi Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of Haduvio to treat serious neurologically mediated conditions. The company is developing Haduvio, an oral extended-release formulation of nalbuphine, which is in phase IIb/III clinical trial for the treatment of chronic pruritus, chronic cough in patients with idiopathic pulmonary fibrosis. It has a license agreement with Endo Pharmaceuticals Inc. to develop and commercialize products incorporating nalbuphine hydrochloride in any formulation. The company was incorporated in 2011 and is headquartered in New Haven, Connecticut.
TRVI (Trevi Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $2.17B, a beta of 1.08 versus the broader market, a 52-week range of 5.38-16.12, average daily share volume of 1.5M, a public-listing history dating back to 2019, approximately 31 full-time employees. These structural characteristics shape how TRVI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.08 places TRVI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TRVI?
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 TRVI snapshot
As of May 15, 2026, spot at $14.21, ATM IV 63.30%, IV rank 7.27%, expected move 18.15%. The butterfly on TRVI 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 63-day expiry.
Why this butterfly structure on TRVI specifically: TRVI IV at 63.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a TRVI butterfly, with a market-implied 1-standard-deviation move of approximately 18.15% (roughly $2.58 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TRVI expiries trade a higher absolute premium for lower per-day decay. Position sizing on TRVI should anchor to the underlying notional of $14.21 per share and to the trader's directional view on TRVI stock.
TRVI butterfly setup
The TRVI 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 TRVI near $14.21, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TRVI chain at a 63-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 TRVI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $13.00 | $2.00 |
| Sell 2 | Call | $14.00 | $1.43 |
| Buy 1 | Call | $15.00 | $0.98 |
TRVI butterfly risk and reward
- Net Premium / Debit
- -$12.50
- Max Profit (per contract)
- $87.41
- Max Loss (per contract)
- -$12.50
- Breakeven(s)
- $13.13, $14.88
- Risk / Reward Ratio
- 6.993
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.
TRVI butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TRVI. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -99.9% | -$12.50 |
| $3.15 | -77.8% | -$12.50 |
| $6.29 | -55.7% | -$12.50 |
| $9.43 | -33.6% | -$12.50 |
| $12.57 | -11.5% | -$12.50 |
| $15.71 | +10.6% | -$12.50 |
| $18.85 | +32.7% | -$12.50 |
| $22.00 | +54.8% | -$12.50 |
| $25.14 | +76.9% | -$12.50 |
| $28.28 | +99.0% | -$12.50 |
When traders use butterfly on TRVI
Butterflies on TRVI are pinning bets - traders use them when they expect TRVI 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.
TRVI thesis for this butterfly
The market-implied 1-standard-deviation range for TRVI extends from approximately $11.63 on the downside to $16.79 on the upside. A TRVI long call butterfly is a pinning play: it pays maximum at the middle strike if TRVI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TRVI IV rank near 7.27% 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 TRVI at 63.30%. As a Healthcare name, TRVI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TRVI-specific events.
TRVI 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. TRVI positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TRVI alongside the broader basket even when TRVI-specific fundamentals are unchanged. Always rebuild the position from current TRVI chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TRVI?
- A butterfly on TRVI is the butterfly strategy applied to TRVI (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 TRVI stock trading near $14.21, the strikes shown on this page are snapped to the nearest listed TRVI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TRVI 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 TRVI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 63.30%), the computed maximum profit is $87.41 per contract and the computed maximum loss is -$12.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TRVI butterfly?
- The breakeven for the TRVI butterfly priced on this page is roughly $13.13 and $14.88 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 TRVI market-implied 1-standard-deviation expected move is approximately 18.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TRVI?
- Butterflies on TRVI are pinning bets - traders use them when they expect TRVI 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 TRVI implied volatility affect this butterfly?
- TRVI ATM IV is at 63.30% with IV rank near 7.27%, 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.