WCN Butterfly Strategy
WCN (Waste Connections, Inc.), in the Industrials sector, (Waste Management industry), listed on NYSE.
Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company also owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. As of December 31, 2021, it owned 334 solid waste collection operations; 142 transfer stations; 61 municipal solid waste (MSW) landfills; 12 E&P waste landfills; 14 non-MSW landfills; 71 recycling operations; 4 intermodal operations; 23 E&P liquid waste injection wells; and 19 E&P waste treatment and oil recovery facilities.
WCN (Waste Connections, Inc.) trades in the Industrials sector, specifically Waste Management, with a market capitalization of approximately $38.66B, a trailing P/E of 36.71, a beta of 0.54 versus the broader market, a 52-week range of 148.835-198, average daily share volume of 1.6M, a public-listing history dating back to 1998, approximately 24K full-time employees. These structural characteristics shape how WCN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.54 indicates WCN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 36.71 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. WCN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on WCN?
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 WCN snapshot
As of May 15, 2026, spot at $156.72, ATM IV 22.00%, IV rank 49.56%, expected move 6.31%. The butterfly on WCN 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 WCN specifically: WCN IV at 22.00% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 6.31% (roughly $9.88 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 WCN expiries trade a higher absolute premium for lower per-day decay. Position sizing on WCN should anchor to the underlying notional of $156.72 per share and to the trader's directional view on WCN stock.
WCN butterfly setup
The WCN 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 WCN near $156.72, the first option leg uses a $150.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WCN 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 WCN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $150.00 | $9.10 |
| Sell 2 | Call | $155.00 | $5.25 |
| Buy 1 | Call | $165.00 | $1.20 |
WCN butterfly risk and reward
- Net Premium / Debit
- +$20.00
- Max Profit (per contract)
- $456.25
- Max Loss (per contract)
- -$480.00
- Breakeven(s)
- $160.20
- Risk / Reward Ratio
- 0.951
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.
WCN butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WCN. 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% | +$20.00 |
| $34.66 | -77.9% | +$20.00 |
| $69.31 | -55.8% | +$20.00 |
| $103.96 | -33.7% | +$20.00 |
| $138.61 | -11.6% | +$20.00 |
| $173.26 | +10.6% | -$480.00 |
| $207.91 | +32.7% | -$480.00 |
| $242.56 | +54.8% | -$480.00 |
| $277.21 | +76.9% | -$480.00 |
| $311.86 | +99.0% | -$480.00 |
When traders use butterfly on WCN
Butterflies on WCN are pinning bets - traders use them when they expect WCN 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.
WCN thesis for this butterfly
The market-implied 1-standard-deviation range for WCN extends from approximately $146.84 on the downside to $166.60 on the upside. A WCN long call butterfly is a pinning play: it pays maximum at the middle strike if WCN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WCN IV rank near 49.56% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on WCN should anchor more to the directional view and the expected-move geometry. As a Industrials name, WCN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WCN-specific events.
WCN 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. WCN positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WCN alongside the broader basket even when WCN-specific fundamentals are unchanged. Always rebuild the position from current WCN chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WCN?
- A butterfly on WCN is the butterfly strategy applied to WCN (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 WCN stock trading near $156.72, the strikes shown on this page are snapped to the nearest listed WCN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WCN 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 WCN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 22.00%), the computed maximum profit is $456.25 per contract and the computed maximum loss is -$480.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WCN butterfly?
- The breakeven for the WCN butterfly priced on this page is roughly $160.20 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 WCN market-implied 1-standard-deviation expected move is approximately 6.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WCN?
- Butterflies on WCN are pinning bets - traders use them when they expect WCN 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 WCN implied volatility affect this butterfly?
- WCN ATM IV is at 22.00% with IV rank near 49.56%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.