UHT Butterfly Strategy
UHT (Universal Health Realty Income Trust), in the Real Estate sector, (REIT - Healthcare Facilities industry), listed on NYSE.
Universal Health Realty Income Trust, a real estate investment trust, invests in healthcare and human service related facilities including acute care hospitals, rehabilitation hospitals, sub-acute care facilities, medical/office buildings, free-standing emergency departments and childcare centers. We have investments in seventy-one properties located in twenty states, including two that are currently under construction.
UHT (Universal Health Realty Income Trust) trades in the Real Estate sector, specifically REIT - Healthcare Facilities, with a market capitalization of approximately $557.1M, a trailing P/E of 31.11, a beta of 0.85 versus the broader market, a 52-week range of 35.26-44.7, average daily share volume of 63K, a public-listing history dating back to 1986. These structural characteristics shape how UHT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.85 places UHT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. UHT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on UHT?
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 UHT snapshot
As of May 15, 2026, spot at $40.23, ATM IV 29.30%, IV rank 10.60%, expected move 8.40%. The butterfly on UHT 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 UHT specifically: UHT IV at 29.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a UHT butterfly, with a market-implied 1-standard-deviation move of approximately 8.40% (roughly $3.38 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 UHT expiries trade a higher absolute premium for lower per-day decay. Position sizing on UHT should anchor to the underlying notional of $40.23 per share and to the trader's directional view on UHT stock.
UHT butterfly setup
The UHT 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 UHT near $40.23, the first option leg uses a $38.22 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UHT 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 UHT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $38.22 | N/A |
| Sell 2 | Call | $40.23 | N/A |
| Buy 1 | Call | $42.24 | N/A |
UHT 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.
UHT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on UHT. 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 UHT
Butterflies on UHT are pinning bets - traders use them when they expect UHT 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.
UHT thesis for this butterfly
The market-implied 1-standard-deviation range for UHT extends from approximately $36.85 on the downside to $43.61 on the upside. A UHT long call butterfly is a pinning play: it pays maximum at the middle strike if UHT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current UHT IV rank near 10.60% 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 UHT at 29.30%. As a Real Estate name, UHT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UHT-specific events.
UHT 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. UHT positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UHT alongside the broader basket even when UHT-specific fundamentals are unchanged. Always rebuild the position from current UHT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on UHT?
- A butterfly on UHT is the butterfly strategy applied to UHT (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 UHT stock trading near $40.23, the strikes shown on this page are snapped to the nearest listed UHT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UHT 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 UHT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.30%), 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 UHT butterfly?
- The breakeven for the UHT 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 UHT market-implied 1-standard-deviation expected move is approximately 8.40%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on UHT?
- Butterflies on UHT are pinning bets - traders use them when they expect UHT 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 UHT implied volatility affect this butterfly?
- UHT ATM IV is at 29.30% with IV rank near 10.60%, 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.