USAC Butterfly Strategy
USAC (USA Compression Partners, LP), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NYSE.
USA Compression Partners, LP, a growth-oriented Delaware limited partnership that provides natural gas compression services in terms of total compression fleet horsepower. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil, as well as operates stations. It primarily focuses on providing natural gas compression services to infrastructure applications, including centralized natural gas gathering systems and processing facilities. The company was founded in 1998 and is headquartered in Austin, Texas.
USAC (USA Compression Partners, LP) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $3.47B, a trailing P/E of 31.73, a beta of 0.18 versus the broader market, a 52-week range of 21.85-29.5, average daily share volume of 209K, a public-listing history dating back to 2013, approximately 854 full-time employees. These structural characteristics shape how USAC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.18 indicates USAC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. USAC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on USAC?
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 USAC snapshot
As of May 15, 2026, spot at $29.91, ATM IV 28.00%, IV rank 5.92%, expected move 8.03%. The butterfly on USAC 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 USAC specifically: USAC IV at 28.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a USAC butterfly, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $2.40 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 USAC expiries trade a higher absolute premium for lower per-day decay. Position sizing on USAC should anchor to the underlying notional of $29.91 per share and to the trader's directional view on USAC stock.
USAC butterfly setup
The USAC 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 USAC near $29.91, the first option leg uses a $28.41 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed USAC 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 USAC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $28.41 | N/A |
| Sell 2 | Call | $29.91 | N/A |
| Buy 1 | Call | $31.41 | N/A |
USAC 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.
USAC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on USAC. 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 USAC
Butterflies on USAC are pinning bets - traders use them when they expect USAC 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.
USAC thesis for this butterfly
The market-implied 1-standard-deviation range for USAC extends from approximately $27.51 on the downside to $32.31 on the upside. A USAC long call butterfly is a pinning play: it pays maximum at the middle strike if USAC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current USAC IV rank near 5.92% 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 USAC at 28.00%. As a Energy name, USAC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to USAC-specific events.
USAC 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. USAC positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move USAC alongside the broader basket even when USAC-specific fundamentals are unchanged. Always rebuild the position from current USAC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on USAC?
- A butterfly on USAC is the butterfly strategy applied to USAC (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 USAC stock trading near $29.91, the strikes shown on this page are snapped to the nearest listed USAC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are USAC 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 USAC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), 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 USAC butterfly?
- The breakeven for the USAC 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 USAC market-implied 1-standard-deviation expected move is approximately 8.03%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on USAC?
- Butterflies on USAC are pinning bets - traders use them when they expect USAC 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 USAC implied volatility affect this butterfly?
- USAC ATM IV is at 28.00% with IV rank near 5.92%, 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.