XBIT Butterfly Strategy
XBIT (XBiotech Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
XBiotech Inc., a biopharmaceutical company, discovers, develops, and commercializes True Human monoclonal antibodies for treating various diseases. The company focuses on developing a pipeline of product candidates targeting both inflammatory and infectious diseases. It is also developing interleukin-1 alpha therapies to treat variety of medical conditions, such as cancer, stroke, heart attack, or arthritis; and mediates tissue breakdown, angiogenesis, the formation of blood clots, malaise, muscle wasting, and inflammation, and True Human COVID-19 therapy for treating the COVID-19 mutant virus. The company was incorporated in 2005 and is headquartered in Austin, Texas.
XBIT (XBiotech Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $76.2M, a beta of 0.86 versus the broader market, a 52-week range of 2.09-3.61, average daily share volume of 33K, a public-listing history dating back to 2015, approximately 92 full-time employees. These structural characteristics shape how XBIT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.86 places XBIT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on XBIT?
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 XBIT snapshot
As of May 15, 2026, spot at $2.46, ATM IV 209.30%, IV rank 42.21%, expected move 60.00%. The butterfly on XBIT 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 XBIT specifically: XBIT IV at 209.30% 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 60.00% (roughly $1.48 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 XBIT expiries trade a higher absolute premium for lower per-day decay. Position sizing on XBIT should anchor to the underlying notional of $2.46 per share and to the trader's directional view on XBIT stock.
XBIT butterfly setup
The XBIT 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 XBIT near $2.46, the first option leg uses a $2.34 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XBIT 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 XBIT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $2.34 | N/A |
| Sell 2 | Call | $2.46 | N/A |
| Buy 1 | Call | $2.58 | N/A |
XBIT 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.
XBIT butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on XBIT. 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 XBIT
Butterflies on XBIT are pinning bets - traders use them when they expect XBIT 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.
XBIT thesis for this butterfly
The market-implied 1-standard-deviation range for XBIT extends from approximately $0.98 on the downside to $3.94 on the upside. A XBIT long call butterfly is a pinning play: it pays maximum at the middle strike if XBIT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XBIT IV rank near 42.21% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on XBIT should anchor more to the directional view and the expected-move geometry. As a Healthcare name, XBIT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XBIT-specific events.
XBIT 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. XBIT positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XBIT alongside the broader basket even when XBIT-specific fundamentals are unchanged. Always rebuild the position from current XBIT chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on XBIT?
- A butterfly on XBIT is the butterfly strategy applied to XBIT (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 XBIT stock trading near $2.46, the strikes shown on this page are snapped to the nearest listed XBIT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are XBIT 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 XBIT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 209.30%), 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 XBIT butterfly?
- The breakeven for the XBIT 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 XBIT market-implied 1-standard-deviation expected move is approximately 60.00%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on XBIT?
- Butterflies on XBIT are pinning bets - traders use them when they expect XBIT 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 XBIT implied volatility affect this butterfly?
- XBIT ATM IV is at 209.30% with IV rank near 42.21%, 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.