TSLA Butterfly Strategy
TSLA (Tesla, Inc.), in the Consumer Cyclical sector, (Auto - Manufacturers industry), listed on NASDAQ.
Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. It operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits; and non-warranty after-sales vehicle, used vehicles, retail merchandise, and vehicle insurance services. This segment also provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; purchase financing and leasing services; services for electric vehicles through its company-owned service locations and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners; and provision of service and repairs to its energy product customers, including under warranty, as well as various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017.
TSLA (Tesla, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Manufacturers, with a market capitalization of approximately $1.67T, a trailing P/E of 371.52, a beta of 1.79 versus the broader market, a 52-week range of 273.21-498.83, average daily share volume of 62.7M, a public-listing history dating back to 2010, approximately 126K full-time employees. These structural characteristics shape how TSLA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.79 indicates TSLA has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 371.52 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 TSLA?
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 TSLA snapshot
As of May 15, 2026, spot at $424.00, ATM IV 44.66%, IV rank 13.93%, expected move 12.80%. The butterfly on TSLA 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 28-day expiry.
Why this butterfly structure on TSLA specifically: TSLA IV at 44.66% is on the cheap side of its 1-year range, which favors premium-buying structures like a TSLA butterfly, with a market-implied 1-standard-deviation move of approximately 12.80% (roughly $54.29 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TSLA expiries trade a higher absolute premium for lower per-day decay. Position sizing on TSLA should anchor to the underlying notional of $424.00 per share and to the trader's directional view on TSLA stock.
TSLA butterfly setup
The TSLA 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 TSLA near $424.00, the first option leg uses a $405.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TSLA chain at a 28-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 TSLA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $405.00 | $32.30 |
| Sell 2 | Call | $425.00 | $21.05 |
| Buy 1 | Call | $445.00 | $13.38 |
TSLA butterfly risk and reward
- Net Premium / Debit
- -$357.50
- Max Profit (per contract)
- $1,528.94
- Max Loss (per contract)
- -$357.50
- Breakeven(s)
- $408.55, $441.43
- Risk / Reward Ratio
- 4.277
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.
TSLA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TSLA. 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 | -100.0% | -$357.50 |
| $93.76 | -77.9% | -$357.50 |
| $187.51 | -55.8% | -$357.50 |
| $281.25 | -33.7% | -$357.50 |
| $375.00 | -11.6% | -$357.50 |
| $468.75 | +10.6% | -$357.50 |
| $562.50 | +32.7% | -$357.50 |
| $656.24 | +54.8% | -$357.50 |
| $749.99 | +76.9% | -$357.50 |
| $843.74 | +99.0% | -$357.50 |
When traders use butterfly on TSLA
Butterflies on TSLA are pinning bets - traders use them when they expect TSLA 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.
TSLA thesis for this butterfly
The market-implied 1-standard-deviation range for TSLA extends from approximately $369.71 on the downside to $478.29 on the upside. A TSLA long call butterfly is a pinning play: it pays maximum at the middle strike if TSLA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TSLA IV rank near 13.93% 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 TSLA at 44.66%. As a Consumer Cyclical name, TSLA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TSLA-specific events.
TSLA 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. TSLA positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TSLA alongside the broader basket even when TSLA-specific fundamentals are unchanged. Always rebuild the position from current TSLA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TSLA?
- A butterfly on TSLA is the butterfly strategy applied to TSLA (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 TSLA stock trading near $424.00, the strikes shown on this page are snapped to the nearest listed TSLA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TSLA 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 TSLA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 44.66%), the computed maximum profit is $1,528.94 per contract and the computed maximum loss is -$357.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TSLA butterfly?
- The breakeven for the TSLA butterfly priced on this page is roughly $408.55 and $441.43 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 TSLA market-implied 1-standard-deviation expected move is approximately 12.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TSLA?
- Butterflies on TSLA are pinning bets - traders use them when they expect TSLA 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 TSLA implied volatility affect this butterfly?
- TSLA ATM IV is at 44.66% with IV rank near 13.93%, 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.