UHS Butterfly Strategy
UHS (Universal Health Services, Inc.), in the Healthcare sector, (Medical - Care Facilities industry), listed on NYSE.
Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. The company operates through Acute Care Hospital Services and Behavioral Health Care Services segments. Its hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services. As of February 24, 2022, it owned and/or operated 363 inpatient facilities, and 40 outpatient and other facilities located in 39 states; Washington, D.C.; the United Kingdom; and Puerto Rico. The company also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services. Universal Health Services, Inc. founded in 1978 and is headquartered in King of Prussia, Pennsylvania.
UHS (Universal Health Services, Inc.) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $10.71B, a trailing P/E of 6.87, a beta of 1.13 versus the broader market, a 52-week range of 152.33-246.33, average daily share volume of 828K, a public-listing history dating back to 1981, approximately 78K full-time employees. These structural characteristics shape how UHS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.13 places UHS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 6.87 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. UHS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on UHS?
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 UHS snapshot
As of May 15, 2026, spot at $167.82, ATM IV 31.50%, IV rank 24.68%, expected move 9.03%. The butterfly on UHS 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 UHS specifically: UHS IV at 31.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a UHS butterfly, with a market-implied 1-standard-deviation move of approximately 9.03% (roughly $15.16 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 UHS expiries trade a higher absolute premium for lower per-day decay. Position sizing on UHS should anchor to the underlying notional of $167.82 per share and to the trader's directional view on UHS stock.
UHS butterfly setup
The UHS 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 UHS near $167.82, the first option leg uses a $160.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UHS 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 UHS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $160.00 | $11.90 |
| Sell 2 | Call | $170.00 | $5.55 |
| Buy 1 | Call | $175.00 | $3.60 |
UHS butterfly risk and reward
- Net Premium / Debit
- -$440.00
- Max Profit (per contract)
- $524.51
- Max Loss (per contract)
- -$440.00
- Breakeven(s)
- $164.40
- Risk / Reward Ratio
- 1.192
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.
UHS butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on UHS. 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% | -$440.00 |
| $37.11 | -77.9% | -$440.00 |
| $74.22 | -55.8% | -$440.00 |
| $111.32 | -33.7% | -$440.00 |
| $148.43 | -11.6% | -$440.00 |
| $185.53 | +10.6% | +$60.00 |
| $222.64 | +32.7% | +$60.00 |
| $259.74 | +54.8% | +$60.00 |
| $296.85 | +76.9% | +$60.00 |
| $333.95 | +99.0% | +$60.00 |
When traders use butterfly on UHS
Butterflies on UHS are pinning bets - traders use them when they expect UHS 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.
UHS thesis for this butterfly
The market-implied 1-standard-deviation range for UHS extends from approximately $152.66 on the downside to $182.98 on the upside. A UHS long call butterfly is a pinning play: it pays maximum at the middle strike if UHS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current UHS IV rank near 24.68% 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 UHS at 31.50%. As a Healthcare name, UHS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UHS-specific events.
UHS 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. UHS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UHS alongside the broader basket even when UHS-specific fundamentals are unchanged. Always rebuild the position from current UHS chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on UHS?
- A butterfly on UHS is the butterfly strategy applied to UHS (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 UHS stock trading near $167.82, the strikes shown on this page are snapped to the nearest listed UHS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UHS 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 UHS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.50%), the computed maximum profit is $524.51 per contract and the computed maximum loss is -$440.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UHS butterfly?
- The breakeven for the UHS butterfly priced on this page is roughly $164.40 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 UHS market-implied 1-standard-deviation expected move is approximately 9.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on UHS?
- Butterflies on UHS are pinning bets - traders use them when they expect UHS 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 UHS implied volatility affect this butterfly?
- UHS ATM IV is at 31.50% with IV rank near 24.68%, 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.