ZVRA Butterfly Strategy
ZVRA (Zevra Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Zevra Therapeutics, Inc., founded in 2006 and based in Celebration, Florida, is a biopharmaceutical company dedicated to discovering and developing innovative treatments for rare diseases. The company employs its proprietary Ligand Activated Therapy (LAT) technology to create novel prodrug versions of existing FDA-approved medications or to enable new applications for other compounds, primarily addressing serious medical conditions within the United States. Zevra's development pipeline is strategically concentrated on high-unmet-need therapeutic areas, including attention deficit hyperactivity disorder (ADHD), stimulant use disorder, and various rare central nervous system (CNS) conditions, such as idiopathic hypersomnia (IH). Their lead product candidate, KP1077, which is a prodrug of d-methylphenidate (known as serdexmethylphenidate), is currently in Phase II clinical trials for the treatment of both IH and narcolepsy. Another key prodrug candidate, KP879, is also advancing through Phase II studies for stimulant use disorder. In addition to its pipeline, Zevra has successfully secured FDA approval for two products: AZSTARYS, a once-daily treatment for ADHD in patients aged six years and older, and APADAZ, an immediate-release combination product containing benzhydrocodone (a prodrug of hydrocodone) and acetaminophen.
ZVRA (Zevra Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $676.3M, a trailing P/E of 11.62, a beta of 0.92 versus the broader market, a 52-week range of 7.16-15.035, average daily share volume of 1.5M, a public-listing history dating back to 2015, approximately 61 full-time employees. These structural characteristics shape how ZVRA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.92 places ZVRA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.62 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a butterfly on ZVRA?
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.
ZVRA snapshot
As of August 14, 2026, spot at $11.27, ATM IV 79.50%, IV rank 17.87%, expected move 22.79%. The butterfly on ZVRA 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 ZVRA specifically: ZVRA IV at 79.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a ZVRA butterfly, with a market-implied 1-standard-deviation move of approximately 22.79% (roughly $2.57 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 ZVRA expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZVRA should anchor to the underlying notional of $11.27 per share and to the trader's directional view on ZVRA stock.
ZVRA butterfly setup
The ZVRA 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 ZVRA at $11.27 on that close, the first option leg uses a $11.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZVRA 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 ZVRA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $11.00 | $0.50 |
| Sell 2 | Call | $11.00 | $0.50 |
| Buy 1 | Call | $12.00 | $0.14 |
ZVRA butterfly risk and reward
- Net Premium / Debit
- +$36.00
- Max Profit (per contract)
- $36.00
- Max Loss (per contract)
- -$64.00
- Breakeven(s)
- $11.36
- Risk / Reward Ratio
- 0.562
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.
ZVRA butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on ZVRA. 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 | -99.9% | +$36.00 |
| $2.50 | -77.8% | +$36.00 |
| $4.99 | -55.7% | +$36.00 |
| $7.48 | -33.6% | +$36.00 |
| $9.97 | -11.5% | +$36.00 |
| $12.46 | +10.6% | -$64.00 |
| $14.95 | +32.7% | -$64.00 |
| $17.45 | +54.8% | -$64.00 |
| $19.94 | +76.9% | -$64.00 |
| $22.43 | +99.0% | -$64.00 |
When traders use butterfly on ZVRA
Butterflies on ZVRA are pinning bets - traders use them when they expect ZVRA 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.
ZVRA thesis for this butterfly
The market-implied 1-standard-deviation range for ZVRA extends from approximately $8.70 on the downside to $13.84 on the upside. A ZVRA long call butterfly is a pinning play: it pays maximum at the middle strike if ZVRA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ZVRA IV rank near 17.87% 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 ZVRA at 79.50%. As a Healthcare name, ZVRA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZVRA-specific events.
ZVRA 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. ZVRA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ZVRA alongside the broader basket even when ZVRA-specific fundamentals are unchanged. Always rebuild the position from current ZVRA chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on ZVRA?
- A butterfly on ZVRA is the butterfly strategy applied to ZVRA (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 ZVRA stock at $11.27 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ZVRA chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ZVRA 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 ZVRA butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 79.50%), the computed maximum profit is $36.00 per contract and the computed maximum loss is -$64.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ZVRA butterfly?
- The breakeven for the ZVRA butterfly priced on this page is roughly $11.36 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 ZVRA market-implied 1-standard-deviation expected move in the same options snapshot is approximately 22.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on ZVRA?
- Butterflies on ZVRA are pinning bets - traders use them when they expect ZVRA 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 ZVRA implied volatility affect this butterfly?
- ZVRA ATM IV is at 79.50% with IV rank near 17.87%, 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.