VAC Butterfly Strategy
VAC (Marriott Vacations Worldwide Corporation), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NYSE.
Marriott Vacations Worldwide Corporation is a prominent global leisure company specializing in the development, marketing, sale, and management of vacation ownership products and associated offerings. Its business operations are structured around two core divisions: Vacation Ownership, and Exchange & Third-Party Management. The corporation oversees numerous vacation ownership brands, including Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Residence Club, and Marriott Vacation Club Pulse. Additionally, it is engaged in the creation, promotion, and sale of timeshare products under The Ritz-Carlton Destination Club brand, and holds the rights to develop, market, and sell luxury residential ownership properties bearing The Ritz-Carlton Residences name. Beyond its core ventures, the enterprise provides exchange networks and membership programs, alongside offering management services to external resorts and lodging facilities through various affiliated brands, such as Interval International, Trading Places International, Vacation Resorts International, and Aqua-Aston. As of December 31, 2021, Marriott Vacations Worldwide maintained a portfolio of approximately 120 properties located across the United States and thirteen other international territories.
VAC (Marriott Vacations Worldwide Corporation) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $4.16B, a beta of 1.24 versus the broader market, a 52-week range of 44.58-131.34, average daily share volume of 497K, a public-listing history dating back to 2011, approximately 21K full-time employees. These structural characteristics shape how VAC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.24 places VAC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. VAC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on VAC?
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.
VAC snapshot
As of August 14, 2026, spot at $120.60, ATM IV 44.00%, IV rank 29.14%, expected move 12.61%. The butterfly on VAC below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on VAC specifically: VAC IV at 44.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a VAC butterfly, with a market-implied 1-standard-deviation move of approximately 12.61% (roughly $15.21 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated VAC expiries trade a higher absolute premium for lower per-day decay. Position sizing on VAC should anchor to the underlying notional of $120.60 per share and to the trader's directional view on VAC stock.
VAC butterfly setup
The VAC butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With VAC at $120.60 on that close, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VAC chain at a 35-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 VAC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $115.00 | $10.70 |
| Sell 2 | Call | $120.00 | $7.60 |
| Buy 1 | Call | $125.00 | $4.75 |
VAC butterfly risk and reward
- Net Premium / Debit
- -$25.00
- Max Profit (per contract)
- $474.90
- Max Loss (per contract)
- -$25.00
- Breakeven(s)
- $115.25, $124.75
- Risk / Reward Ratio
- 18.996
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.
VAC butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on VAC. 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% | -$25.00 |
| $26.67 | -77.9% | -$25.00 |
| $53.34 | -55.8% | -$25.00 |
| $80.00 | -33.7% | -$25.00 |
| $106.67 | -11.6% | -$25.00 |
| $133.33 | +10.6% | -$25.00 |
| $160.00 | +32.7% | -$25.00 |
| $186.66 | +54.8% | -$25.00 |
| $213.32 | +76.9% | -$25.00 |
| $239.99 | +99.0% | -$25.00 |
When traders use butterfly on VAC
Butterflies on VAC are pinning bets - traders use them when they expect VAC 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.
VAC thesis for this butterfly
The market-implied 1-standard-deviation range for VAC extends from approximately $105.39 on the downside to $135.81 on the upside. A VAC long call butterfly is a pinning play: it pays maximum at the middle strike if VAC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current VAC IV rank near 29.14% 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 VAC at 44.00%. As a Consumer Cyclical name, VAC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VAC-specific events.
VAC 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. VAC positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VAC alongside the broader basket even when VAC-specific fundamentals are unchanged. Always rebuild the position from current VAC chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on VAC?
- A butterfly on VAC is the butterfly strategy applied to VAC (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 VAC stock at $120.60 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed VAC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are VAC 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 VAC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 44.00%), the computed maximum profit is $474.90 per contract and the computed maximum loss is -$25.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a VAC butterfly?
- The breakeven for the VAC butterfly priced on this page is roughly $115.25 and $124.75 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The VAC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 12.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on VAC?
- Butterflies on VAC are pinning bets - traders use them when they expect VAC 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 VAC implied volatility affect this butterfly?
- VAC ATM IV is at 44.00% with IV rank near 29.14%, 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.