ZDGE Butterfly Strategy
ZDGE (Zedge, Inc.), in the Communication Services sector, (Internet Content & Information industry), listed on AMEX.
Zedge, Inc. runs a digital content and publishing service that reaches users across the globe. This platform allows individuals to customize their mobile devices with a range of options, such as unique ringtones, personalized home screen app icons, diverse wallpapers, interactive widgets, and distinct notification sounds. The company, established in 2008, is headquartered in New York, New York.
ZDGE (Zedge, Inc.) trades in the Communication Services sector, specifically Internet Content & Information, with a market capitalization of approximately $38.6M, a beta of 1.22 versus the broader market, a 52-week range of 2.21-4.7, average daily share volume of 117K, a public-listing history dating back to 2016, approximately 86 full-time employees. These structural characteristics shape how ZDGE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.22 places ZDGE roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ZDGE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on ZDGE?
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.
ZDGE snapshot
As of August 14, 2026, spot at $2.97, ATM IV 101.70%, IV rank 17.19%, expected move 29.16%. The butterfly on ZDGE below is built from the 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 ZDGE specifically: ZDGE IV at 101.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a ZDGE butterfly, with a market-implied 1-standard-deviation move of approximately 29.16% (roughly $0.87 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 ZDGE expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZDGE should anchor to the underlying notional of $2.97 per share and to the trader's directional view on ZDGE stock.
ZDGE butterfly setup
The ZDGE 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 ZDGE at $2.97 on that close, the first option leg uses a $2.82 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZDGE 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 ZDGE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $2.82 | N/A |
| Sell 2 | Call | $2.97 | N/A |
| Buy 1 | Call | $3.12 | N/A |
ZDGE 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.
ZDGE butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ZDGE. 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 ZDGE
Butterflies on ZDGE are pinning bets - traders use them when they expect ZDGE 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.
ZDGE thesis for this butterfly
The market-implied 1-standard-deviation range for ZDGE extends from approximately $2.10 on the downside to $3.84 on the upside. A ZDGE long call butterfly is a pinning play: it pays maximum at the middle strike if ZDGE settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ZDGE IV rank near 17.19% 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 ZDGE at 101.70%. As a Communication Services name, ZDGE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZDGE-specific events.
ZDGE 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. ZDGE positions also carry Communication Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ZDGE alongside the broader basket even when ZDGE-specific fundamentals are unchanged. Always rebuild the position from current ZDGE chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ZDGE?
- A butterfly on ZDGE is the butterfly strategy applied to ZDGE (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 ZDGE stock at $2.97 on the most recent close, the strikes shown on this page are snapped to the nearest listed ZDGE chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ZDGE 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 ZDGE butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 101.70%), 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 ZDGE butterfly?
- The breakeven for the ZDGE butterfly priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 ZDGE market-implied 1-standard-deviation expected move in the same options snapshot is approximately 29.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ZDGE?
- Butterflies on ZDGE are pinning bets - traders use them when they expect ZDGE 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 ZDGE implied volatility affect this butterfly?
- ZDGE ATM IV is at 101.70% with IV rank near 17.19%, 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.