UPST Butterfly Strategy
UPST (Upstart Holdings, Inc.), in the Financial Services sector, (Financial - Credit Services industry), listed on NASDAQ.
Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform aggregates consumer demand for loans and connects it to its network of the company's AI-enabled bank partners. The company was founded in 2012 and is headquartered in San Mateo, California.
UPST (Upstart Holdings, Inc.) trades in the Financial Services sector, specifically Financial - Credit Services, with a market capitalization of approximately $2.58B, a trailing P/E of 52.94, a beta of 2.26 versus the broader market, a 52-week range of 23.965-87.3, average daily share volume of 5.0M, a public-listing history dating back to 2020, approximately 1K full-time employees. These structural characteristics shape how UPST stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.26 indicates UPST has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 52.94 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a butterfly on UPST?
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 UPST snapshot
As of May 15, 2026, spot at $29.71, ATM IV 71.01%, IV rank 26.28%, expected move 20.36%. The butterfly on UPST 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 28-day expiry.
Why this butterfly structure on UPST specifically: UPST IV at 71.01% is on the cheap side of its 1-year range, which favors premium-buying structures like a UPST butterfly, with a market-implied 1-standard-deviation move of approximately 20.36% (roughly $6.05 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated UPST expiries trade a higher absolute premium for lower per-day decay. Position sizing on UPST should anchor to the underlying notional of $29.71 per share and to the trader's directional view on UPST stock.
UPST butterfly setup
The UPST 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 UPST near $29.71, the first option leg uses a $28.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UPST chain at a 28-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 UPST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.00 | $3.38 |
| Sell 2 | Call | $30.00 | $2.33 |
| Buy 1 | Call | $31.00 | $1.91 |
UPST butterfly risk and reward
- Net Premium / Debit
- -$63.00
- Max Profit (per contract)
- $123.43
- Max Loss (per contract)
- -$63.00
- Breakeven(s)
- $28.63
- Risk / Reward Ratio
- 1.959
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.
UPST butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on UPST. 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% | -$63.00 |
| $6.58 | -77.9% | -$63.00 |
| $13.15 | -55.8% | -$63.00 |
| $19.71 | -33.6% | -$63.00 |
| $26.28 | -11.5% | -$63.00 |
| $32.85 | +10.6% | +$37.00 |
| $39.42 | +32.7% | +$37.00 |
| $45.99 | +54.8% | +$37.00 |
| $52.55 | +76.9% | +$37.00 |
| $59.12 | +99.0% | +$37.00 |
When traders use butterfly on UPST
Butterflies on UPST are pinning bets - traders use them when they expect UPST 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.
UPST thesis for this butterfly
The market-implied 1-standard-deviation range for UPST extends from approximately $23.66 on the downside to $35.76 on the upside. A UPST long call butterfly is a pinning play: it pays maximum at the middle strike if UPST settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current UPST IV rank near 26.28% 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 UPST at 71.01%. As a Financial Services name, UPST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UPST-specific events.
UPST 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. UPST positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UPST alongside the broader basket even when UPST-specific fundamentals are unchanged. Always rebuild the position from current UPST chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on UPST?
- A butterfly on UPST is the butterfly strategy applied to UPST (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 UPST stock trading near $29.71, the strikes shown on this page are snapped to the nearest listed UPST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UPST 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 UPST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 71.01%), the computed maximum profit is $123.43 per contract and the computed maximum loss is -$63.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UPST butterfly?
- The breakeven for the UPST butterfly priced on this page is roughly $28.63 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 UPST market-implied 1-standard-deviation expected move is approximately 20.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on UPST?
- Butterflies on UPST are pinning bets - traders use them when they expect UPST 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 UPST implied volatility affect this butterfly?
- UPST ATM IV is at 71.01% with IV rank near 26.28%, 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.