UEIC Butterfly Strategy
UEIC (Universal Electronics Inc.), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NASDAQ.
Universal Electronics Inc. designs, develops, manufactures, and sells pre-programmed and universal control products, audio-video (AV) accessories, and intelligent wireless security and smart home products for video services, consumer electronics, security, home automation, climate control, and home appliance markets. The company offers universal radio frequency (RF) and infrared remote controls primarily for sale to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; integrated circuits on which its software and universal device control database is embedded for sale to OEMs, video service providers, and private label customers; and software, firmware, and technology solutions that enable devices, such as televisions, set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to connect and interact with home networks and interactive services to control and deliver home entertainment, smart home services, and device or system information. It also provides cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses principally to OEMs and video service providers; RF sensors for residential security, safety, and home automation applications; wall-mount and handheld thermostat controllers and connected accessories for intelligent energy management systems, primarily to OEM customers, as well as hotels and hospitality system integrators; and AV accessories to consumers, including universal remote controls, television wall mounts, and stands and digital television antennas. The company also serves through a network of national and regional distributors and dealers. It sells its products under the One For All brand in the United States, the People's Republic of China, rest of Asia, Europe, Latin America, and internationally. The company was incorporated in 1986 and is headquartered in Scottsdale, Arizona.
UEIC (Universal Electronics Inc.) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $48.6M, a beta of 1.24 versus the broader market, a 52-week range of 2.69-7.5, average daily share volume of 56K, a public-listing history dating back to 1993, approximately 4K full-time employees. These structural characteristics shape how UEIC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.24 places UEIC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on UEIC?
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 UEIC snapshot
As of May 15, 2026, spot at $3.96, ATM IV 101.80%, IV rank 18.40%, expected move 29.19%. The butterfly on UEIC 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 UEIC specifically: UEIC IV at 101.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a UEIC butterfly, with a market-implied 1-standard-deviation move of approximately 29.19% (roughly $1.16 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 UEIC expiries trade a higher absolute premium for lower per-day decay. Position sizing on UEIC should anchor to the underlying notional of $3.96 per share and to the trader's directional view on UEIC stock.
UEIC butterfly setup
The UEIC 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 UEIC near $3.96, the first option leg uses a $3.76 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UEIC 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 UEIC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.76 | N/A |
| Sell 2 | Call | $3.96 | N/A |
| Buy 1 | Call | $4.16 | N/A |
UEIC 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.
UEIC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on UEIC. 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 UEIC
Butterflies on UEIC are pinning bets - traders use them when they expect UEIC 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.
UEIC thesis for this butterfly
The market-implied 1-standard-deviation range for UEIC extends from approximately $2.80 on the downside to $5.12 on the upside. A UEIC long call butterfly is a pinning play: it pays maximum at the middle strike if UEIC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current UEIC IV rank near 18.40% 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 UEIC at 101.80%. As a Technology name, UEIC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UEIC-specific events.
UEIC 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. UEIC positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UEIC alongside the broader basket even when UEIC-specific fundamentals are unchanged. Always rebuild the position from current UEIC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on UEIC?
- A butterfly on UEIC is the butterfly strategy applied to UEIC (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 UEIC stock trading near $3.96, the strikes shown on this page are snapped to the nearest listed UEIC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UEIC 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 UEIC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 101.80%), 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 UEIC butterfly?
- The breakeven for the UEIC 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 UEIC market-implied 1-standard-deviation expected move is approximately 29.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on UEIC?
- Butterflies on UEIC are pinning bets - traders use them when they expect UEIC 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 UEIC implied volatility affect this butterfly?
- UEIC ATM IV is at 101.80% with IV rank near 18.40%, 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.