WK Butterfly Strategy
WK (Workiva Inc.), in the Technology sector, (Software - Application industry), listed on NYSE.
Workiva Inc. is a global provider of cloud-based software solutions designed to streamline and manage compliance and regulatory reporting. Its flagship offering, the Workiva platform, delivers a suite of advanced capabilities such as secure collaboration, robust data linking and integration, precise granular permissions, efficient process management, and comprehensive audit trails. This platform empowers users to centralize data from various sources, including enterprise resource planning (ERP), governance, risk, and compliance (GRC), human capital management (HCM), customer relationship management (CRM) systems, and numerous other third-party cloud-based or on-premise applications. Workiva serves a diverse clientele that spans public and private companies, governmental organizations, and academic institutions. The company was established in 2008 and is headquartered in Ames, Iowa.
WK (Workiva Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $3.70B, a trailing P/E of 80.51, a beta of 0.44 versus the broader market, a 52-week range of 43.34-97.095, average daily share volume of 1.0M, a public-listing history dating back to 2014, approximately 3K full-time employees. These structural characteristics shape how WK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.44 indicates WK 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 80.51 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 WK?
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.
WK snapshot
As of August 14, 2026, spot at $70.78, ATM IV 54.60%, IV rank 10.90%, expected move 15.65%. The butterfly on WK 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 7-day expiry.
Why this butterfly structure on WK specifically: WK IV at 54.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a WK butterfly, with a market-implied 1-standard-deviation move of approximately 15.65% (roughly $11.08 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated WK expiries trade a higher absolute premium for lower per-day decay. Position sizing on WK should anchor to the underlying notional of $70.78 per share and to the trader's directional view on WK stock.
WK butterfly setup
The WK 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 WK at $70.78 on that close, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WK chain at a 7-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 WK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $65.00 | $7.00 |
| Sell 2 | Call | $70.00 | $3.65 |
| Buy 1 | Call | $75.00 | $2.00 |
WK butterfly risk and reward
- Net Premium / Debit
- -$170.00
- Max Profit (per contract)
- $301.80
- Max Loss (per contract)
- -$170.00
- Breakeven(s)
- $66.70, $73.30
- Risk / Reward Ratio
- 1.775
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.
WK butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on WK. 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% | -$170.00 |
| $15.66 | -77.9% | -$170.00 |
| $31.31 | -55.8% | -$170.00 |
| $46.96 | -33.7% | -$170.00 |
| $62.60 | -11.5% | -$170.00 |
| $78.25 | +10.6% | -$170.00 |
| $93.90 | +32.7% | -$170.00 |
| $109.55 | +54.8% | -$170.00 |
| $125.20 | +76.9% | -$170.00 |
| $140.85 | +99.0% | -$170.00 |
When traders use butterfly on WK
Butterflies on WK are pinning bets - traders use them when they expect WK 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.
WK thesis for this butterfly
The market-implied 1-standard-deviation range for WK extends from approximately $59.70 on the downside to $81.86 on the upside. A WK long call butterfly is a pinning play: it pays maximum at the middle strike if WK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WK IV rank near 10.90% 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 WK at 54.60%. As a Technology name, WK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WK-specific events.
WK 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. WK positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WK alongside the broader basket even when WK-specific fundamentals are unchanged. Always rebuild the position from current WK chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on WK?
- A butterfly on WK is the butterfly strategy applied to WK (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 WK stock at $70.78 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed WK chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are WK 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 WK butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 54.60%), the computed maximum profit is $301.80 per contract and the computed maximum loss is -$170.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WK butterfly?
- The breakeven for the WK butterfly priced on this page is roughly $66.70 and $73.30 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 WK market-implied 1-standard-deviation expected move in the same options snapshot is approximately 15.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on WK?
- Butterflies on WK are pinning bets - traders use them when they expect WK 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 WK implied volatility affect this butterfly?
- WK ATM IV is at 54.60% with IV rank near 10.90%, 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.