ZBH Butterfly Strategy
ZBH (Zimmer Biomet Holdings, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NYSE.
Zimmer Biomet Holdings, Inc., together with its subsidiaries, operates in the musculoskeletal healthcare business in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company designs, manufactures, and markets orthopaedic reconstructive products, such as knee and hip products; S.E.T. products, including sports medicine, biologics, foot and ankle, extremities, and trauma products; spine products comprising medical devices and surgical instruments; and face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest toss facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers dental products that include dental reconstructive implants, and dental prosthetic and regenerative products, as well as robotic, surgical and bone cement products. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopedic surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015.
ZBH (Zimmer Biomet Holdings, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $16.00B, a trailing P/E of 21.19, a beta of 0.47 versus the broader market, a 52-week range of 79.12-108.29, average daily share volume of 2.3M, a public-listing history dating back to 2001, approximately 17K full-time employees. These structural characteristics shape how ZBH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.47 indicates ZBH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ZBH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ZBH?
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 ZBH snapshot
As of May 15, 2026, spot at $83.86, ATM IV 26.60%, IV rank 4.00%, expected move 7.63%. The butterfly on ZBH 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 ZBH specifically: ZBH IV at 26.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a ZBH butterfly, with a market-implied 1-standard-deviation move of approximately 7.63% (roughly $6.40 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 ZBH expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZBH should anchor to the underlying notional of $83.86 per share and to the trader's directional view on ZBH stock.
ZBH butterfly setup
The ZBH 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 ZBH near $83.86, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZBH 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 ZBH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $5.35 |
| Sell 2 | Call | $85.00 | $2.25 |
| Buy 1 | Call | $90.00 | $0.65 |
ZBH butterfly risk and reward
- Net Premium / Debit
- -$150.00
- Max Profit (per contract)
- $337.09
- Max Loss (per contract)
- -$150.00
- Breakeven(s)
- $81.50, $88.50
- Risk / Reward Ratio
- 2.247
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.
ZBH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ZBH. 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% | -$150.00 |
| $18.55 | -77.9% | -$150.00 |
| $37.09 | -55.8% | -$150.00 |
| $55.63 | -33.7% | -$150.00 |
| $74.17 | -11.6% | -$150.00 |
| $92.71 | +10.6% | -$150.00 |
| $111.25 | +32.7% | -$150.00 |
| $129.80 | +54.8% | -$150.00 |
| $148.34 | +76.9% | -$150.00 |
| $166.88 | +99.0% | -$150.00 |
When traders use butterfly on ZBH
Butterflies on ZBH are pinning bets - traders use them when they expect ZBH 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.
ZBH thesis for this butterfly
The market-implied 1-standard-deviation range for ZBH extends from approximately $77.46 on the downside to $90.26 on the upside. A ZBH long call butterfly is a pinning play: it pays maximum at the middle strike if ZBH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ZBH IV rank near 4.00% 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 ZBH at 26.60%. As a Healthcare name, ZBH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZBH-specific events.
ZBH 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. ZBH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ZBH alongside the broader basket even when ZBH-specific fundamentals are unchanged. Always rebuild the position from current ZBH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ZBH?
- A butterfly on ZBH is the butterfly strategy applied to ZBH (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 ZBH stock trading near $83.86, the strikes shown on this page are snapped to the nearest listed ZBH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ZBH 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 ZBH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.60%), the computed maximum profit is $337.09 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ZBH butterfly?
- The breakeven for the ZBH butterfly priced on this page is roughly $81.50 and $88.50 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 ZBH market-implied 1-standard-deviation expected move is approximately 7.63%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ZBH?
- Butterflies on ZBH are pinning bets - traders use them when they expect ZBH 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 ZBH implied volatility affect this butterfly?
- ZBH ATM IV is at 26.60% with IV rank near 4.00%, 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.