Butterfly spread calculator a narrow bet on going nowhere
A butterfly buys one call low, sells two at the middle, and buys one high. The payoff is a tent: maximum profit exactly at the body strike, falling away on both sides, with risk capped at a small debit. It is the cheapest way to express a precise view that a stock finishes near a specific price.
Outlook: Neutral — pinned near a price
Max profit
—
best case at expiry
Max loss
—
worst case at expiry
Breakeven
—
where the trade turns even
Net debit / credit
—
to open the position
Your call butterfly
Per-share premiums. One contract = 100 shares.
100 shares per contract
Profit at expiryLoss at expiryBreakevenStrikes & spot
How a call butterfly pays
Net debit = lower wing + upper wing − (2 × body premium)
Max profit = (wing width − net debit) × 100 × butterflies (at the body)
Max loss = net debit × 100 × butterflies (beyond either wing)
Lower breakeven = lower strike + net debit
Upper breakeven = upper strike − net debit
Very cheap for the payoff offered. Butterflies often show 5:1 or better max-profit-to-risk, which is what makes them tempting.
That ratio needs a precise landing. The peak exists at exactly one price. A dollar either way and the profit falls off sharply.
Both wings cap your risk. Beyond either outer strike the loss is fixed at the debit, no matter how far price runs.
Worth naming. The headline risk-reward is real but rarely achieved. Maximum profit requires the underlying to finish at the body strike — not near it, at it. Judge a butterfly by its value across the range you consider likely, not by a peak that occupies a single point.
What this does not model
Every figure here is the payoff at expiry. Before then your position is marked at market prices that still carry time value, so a trade can show a loss while sitting exactly where you wanted it — falling implied volatility alone will do that.
Short legs carry assignment risk. American-style options can be exercised at any time, most commonly on in-the-money calls just before an ex-dividend date. The diagram assumes you hold every leg to expiry.
For the live version — real Greeks, current marks and what-if scenarios against actual
chain data — that is what the GreeksView desk does, in your
browser, on your own broker keys.
Frequently asked questions
What is the maximum profit on a butterfly spread?
The wing width minus the net debit, times 100 per butterfly, and only if the underlying finishes exactly at the body strike. With 5-point wings and a $1.20 debit, that is $380 — but it decays quickly as price moves away from the body.
Where are the breakevens on a butterfly?
The lower strike plus the net debit, and the upper strike minus the net debit. On a 95/100/105 butterfly costing $1.20, that is $96.20 and $103.80 — a narrow profitable band, which is the point of the structure.
Why is my butterfly not showing much profit even though the stock is near the body?
Butterflies realise most of their value only very close to expiry. With time remaining, the short body options still carry substantial time value, which suppresses the position's mark. A butterfly that will pay well often looks flat until the final days.
Is a butterfly a debit or a credit position?
Usually a small net debit — you pay for both wings and collect on the two body options, and the wings normally cost more. That debit is your maximum loss, which is why butterflies are considered low-risk despite involving four contracts.
Are commissions included in these numbers?
No — every figure is gross. On multi-leg positions this matters more than people expect: four legs to open and four to close is eight commissions against what may be a couple of hundred dollars of credit. Check your broker's per-contract rate against the max profit shown here before deciding a trade is worth putting on.
Run this against a live chain
GreeksView builds positions from real option chains with live Greeks, gamma exposure
and what-if scenarios — in your browser, on your own broker keys.