TSQ Butterfly Strategy
TSQ (Townsquare Media, Inc.), in the Communication Services sector, (Advertising Agencies industry), listed on NYSE.
Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers various digital marketing solutions, including hosting, search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, email marketing, and website retargeting services, as well as traditional and mobile-enabled website design, creation, and development services. The Digital Advertising segment provides digital advertising on its owned and operated digital properties, and digital programmatic advertising platforms, as well as data analytics and management platform. The Broadcast Advertising segment engages in the sale of local radio stations to local, regional, and national spot advertisers, and national network advertisers. As of December 31, 2021, this segment owned and operated 322 radio stations and approximately 330 local websites in 67 local markets.
TSQ (Townsquare Media, Inc.) trades in the Communication Services sector, specifically Advertising Agencies, with a market capitalization of approximately $105.8M, a beta of 1.18 versus the broader market, a 52-week range of 4.3-9.31, average daily share volume of 152K, a public-listing history dating back to 2014, approximately 2K full-time employees. These structural characteristics shape how TSQ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.18 places TSQ roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TSQ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TSQ?
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 TSQ snapshot
As of May 15, 2026, spot at $6.08, ATM IV 82.70%, IV rank 27.46%, expected move 23.71%. The butterfly on TSQ 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 TSQ specifically: TSQ IV at 82.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a TSQ butterfly, with a market-implied 1-standard-deviation move of approximately 23.71% (roughly $1.44 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 TSQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on TSQ should anchor to the underlying notional of $6.08 per share and to the trader's directional view on TSQ stock.
TSQ butterfly setup
The TSQ 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 TSQ near $6.08, the first option leg uses a $5.78 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TSQ 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 TSQ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.78 | N/A |
| Sell 2 | Call | $6.08 | N/A |
| Buy 1 | Call | $6.38 | N/A |
TSQ 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.
TSQ butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TSQ. 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 TSQ
Butterflies on TSQ are pinning bets - traders use them when they expect TSQ 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.
TSQ thesis for this butterfly
The market-implied 1-standard-deviation range for TSQ extends from approximately $4.64 on the downside to $7.52 on the upside. A TSQ long call butterfly is a pinning play: it pays maximum at the middle strike if TSQ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TSQ IV rank near 27.46% 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 TSQ at 82.70%. As a Communication Services name, TSQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TSQ-specific events.
TSQ 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. TSQ positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TSQ alongside the broader basket even when TSQ-specific fundamentals are unchanged. Always rebuild the position from current TSQ chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TSQ?
- A butterfly on TSQ is the butterfly strategy applied to TSQ (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 TSQ stock trading near $6.08, the strikes shown on this page are snapped to the nearest listed TSQ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TSQ 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 TSQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 82.70%), 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 TSQ butterfly?
- The breakeven for the TSQ 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 TSQ market-implied 1-standard-deviation expected move is approximately 23.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TSQ?
- Butterflies on TSQ are pinning bets - traders use them when they expect TSQ 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 TSQ implied volatility affect this butterfly?
- TSQ ATM IV is at 82.70% with IV rank near 27.46%, 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.