MRK Iron Butterfly — Nov 20, 2026

MRK (Merck & Company, Inc. Common Stock (new)) presents a iron butterfly opportunity with very elevated implied volatility. IV Rank 93. IV 3832.0% trades 1665.0pp above 30-day HV (2167.0%). This setup favors net premium sellers.

Sell the $145 ATM put and the $145 ATM call simultaneously (both at the same strike near the underlying), with long wings further out for defined risk. Higher max profit than a condor but a tighter profit window — ideal when you expect a stalling move into expiration. Underlying ~$145.60, 39 DTE. Max profit $763 per contract, max loss $237, 321.9% return on risk, 25% POP. Breakevens at $137.37 and $152.63.

Management: take profit at ~50% of max profit ($382). Cut at 2x credit ($1526 loss). If short strike is breached with > 14 DTE, consider rolling out for a credit. Close before expiration week to avoid gamma risk.

Underlying: MRK @ ~$145.60 Expiration: Nov 20, 2026 (39 DTE) Net credit (entry): ~$763.00 per spread Legs:

• Sell MRK Nov 20, 2026 $145 Put (delta -0.47, mid $6.13)
• Buy MRK Nov 20, 2026 $135 Put (delta -0.24, mid $2.42)
• Sell MRK Nov 20, 2026 $145 Call (delta 0.53, mid $7.03)
• Buy MRK Nov 20, 2026 $155 Call (delta 0.31, mid $3.10)

Use limit orders at the mid or slightly worse. Verify bid-ask spread (currently ~4.5% of mid) before sending.

Take profit at 50% of max profit ($382). Cut loss if position reaches 2x credit received ($1526 loss). Roll if tested with > 14 DTE remaining.