How To Make Marvell Stock Float Like A Butterfly With This Trade

Group 1: Market Overview - Crude oil prices have jumped by 5% following a significant move by former President Trump [1] - Marvell Technology (MRVL) stock has been fluctuating around a buy zone since early October but has recently fallen below its entry point due to market declines [1] Group 2: Options Strategy - A butterfly spread is a neutral, income-oriented options strategy designed for traders expecting minimal price movement, offering limited risk and profit potential [2][9] - The typical long call butterfly involves buying one in-the-money call, selling two at-the-money calls, and buying one out-of-the-money call, creating symmetrical risk and reward [3] Group 3: Marvell Stock Butterfly Example - For Marvell stock, a butterfly spread can be constructed using a Nov. 21 expiration, involving buying one $70 call at $12.60, selling two $80 calls at $6.15 each, and buying one $90 call at $2.40 [4] - The total cost of this trade is $270 per butterfly, representing the maximum loss potential if Marvell stock closes below $70 or above $90 at expiration [4] Group 4: Profit Potential - The maximum gain from this butterfly spread is $730, occurring if Marvell stock closes exactly at $80 at expiration [5] - Breakeven prices are calculated at $72.70 and $87.30, based on the lower and upper strikes adjusted for premiums [5] Group 5: Realistic Profit Outlook - Achieving maximum profit is unlikely, as it requires the stock to close exactly at the short strike at expiration; most successful trades capture partial profits [7] - A realistic target for butterfly trades is a 20% return on capital at risk, translating to approximately $55 profit on a $270 investment [8]