TZOO Butterfly Strategy
TZOO (Travelzoo), in the Communication Services sector, (Advertising Agencies industry), listed on NASDAQ.
Travelzoo, an Internet media company, provides travel, entertainment, and local deals from travel and entertainment companies, and local businesses in the Asia Pacific, Europe, and North America. Its publications and products include Travelzoo Website; Travelzoo iPhone and Android apps; Travelzoo Top 20 email newsletter; and Newsflash email alert service. The company also operates the Travelzoo Network, a network of third-party Websites that list travel deals published by the company; and Local Deals and Getaway listings, which allow its members to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was founded in 1998 and is headquartered in New York, New York.
TZOO (Travelzoo) trades in the Communication Services sector, specifically Advertising Agencies, with a market capitalization of approximately $97.5M, a trailing P/E of 24.10, a beta of 1.27 versus the broader market, a 52-week range of 4.72-14.18, average daily share volume of 260K, a public-listing history dating back to 2002, approximately 227 full-time employees. These structural characteristics shape how TZOO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.27 places TZOO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on TZOO?
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 TZOO snapshot
As of May 15, 2026, spot at $9.23, ATM IV 93.00%, IV rank 22.52%, expected move 26.66%. The butterfly on TZOO 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 TZOO specifically: TZOO IV at 93.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a TZOO butterfly, with a market-implied 1-standard-deviation move of approximately 26.66% (roughly $2.46 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 TZOO expiries trade a higher absolute premium for lower per-day decay. Position sizing on TZOO should anchor to the underlying notional of $9.23 per share and to the trader's directional view on TZOO stock.
TZOO butterfly setup
The TZOO 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 TZOO near $9.23, the first option leg uses a $8.77 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TZOO 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 TZOO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $8.77 | N/A |
| Sell 2 | Call | $9.23 | N/A |
| Buy 1 | Call | $9.69 | N/A |
TZOO 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.
TZOO butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TZOO. 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 TZOO
Butterflies on TZOO are pinning bets - traders use them when they expect TZOO 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.
TZOO thesis for this butterfly
The market-implied 1-standard-deviation range for TZOO extends from approximately $6.77 on the downside to $11.69 on the upside. A TZOO long call butterfly is a pinning play: it pays maximum at the middle strike if TZOO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TZOO IV rank near 22.52% 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 TZOO at 93.00%. As a Communication Services name, TZOO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TZOO-specific events.
TZOO 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. TZOO positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TZOO alongside the broader basket even when TZOO-specific fundamentals are unchanged. Always rebuild the position from current TZOO chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TZOO?
- A butterfly on TZOO is the butterfly strategy applied to TZOO (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 TZOO stock trading near $9.23, the strikes shown on this page are snapped to the nearest listed TZOO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TZOO 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 TZOO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 93.00%), 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 TZOO butterfly?
- The breakeven for the TZOO 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 TZOO market-implied 1-standard-deviation expected move is approximately 26.66%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TZOO?
- Butterflies on TZOO are pinning bets - traders use them when they expect TZOO 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 TZOO implied volatility affect this butterfly?
- TZOO ATM IV is at 93.00% with IV rank near 22.52%, 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.