# Butterfly Spread Calculator - Max Profit, Loss & Breakevens Source: https://theoptionsbench.com/butterfly-spread-calculator/ > Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/butterfly-spread-calculator/ --- Long butterfly - key facts A long butterfly buys one lower and one upper option (all calls or all puts) and sells two at the body strike - a low-cost, defined-risk bet that the stock pins the body at expiration. Max profit (Wing width - net debit) × 100 - reached only if price pins the body strike. Max loss The net debit × 100 - lost if price finishes outside either wing. Lower breakeven Lower strike + net debit (per share). Upper breakeven Upper strike - net debit (per share). Return on risk Max profit ÷ net debit. Want the full explanation? Read What is a Butterfly Spread? . How to set it up Outlook: A pinpoint-neutral bet: you think the stock parks at one exact price by expiration AND that today's volatility is too rich and about to cool. A long butterfly is net-short vega, so falling IV works for you - you want IV elevated going in, not cheap. Ideal DTE 21-45 days is the usual window. Inside ~21 days there's no time for the stock to drift to the body or for theta to build the tent; much further out and decay barely works yet. Go shorter only with a strong pin-the-strike view into a near-dated event. Strike selection Place the body where you expect the stock to land, then set both wings the same width - roughly one expected move out, so the breakevens sit just past where price realistically travels. Wings too narrow and a normal day blows through them; too wide and you've overpaid the debit for a payoff you'll never see. Enter when Enter when IV is high and you expect it to fall - IV Rank above ~40. A long butterfly is net-short vega, so an IV drop lifts the tent for you, and the rich body options you sell cushion the debit. Don't be talked out of one because the debit looks pricey in high IV - the real trap is buying a fly in dead-low IV with nothing left to contract. Take profit Close at ~25-50% of max profit and walk. The peak only pays in full if the stock pins the body at the bell - the zone is narrow, so chasing the last dollars means holding a position whose value evaporates the moment price drifts off the body. Manage / exit Let it work - most of the value shows up late as price drifts toward the body. (This is the one fly managed by time-to-expiry, not the 21-DTE rule - a long debit fly needs the late drift to pay.) Close it in the last ~7-10 days to bank the value and dodge pin/gamma risk, but cut sooner if price punches past a wing. Cost check A 1-2-1 butterfly opens four contracts and closes four more - eight legs of commission and bid-ask against a small debit. Skip the trade if fills and fees eat a meaningful slice of the thin edge you're paying for. Use it when: You have a specific, high-conviction view that a stock pins one price into a quiet expiration AND IV is rich and likely to cool - a small, defined debit for a lopsided payoff if you're right. Skip it when: You expect a real move, or IV is already dead-low with nothing left to contract - reach for an Iron Condor for a wide forgiving zone, or sell premium outright if you'd rather be paid the credit. Starting points, not rules - the conventions experienced sellers reach for first. Your account, thesis and risk move every number here. See every strategy's setup -> ## How to use this calculator - Enter the current share price and days to expiration. - Enter the three strikes - the lower (long), the body (short ×2), and the upper (long), kept equally spaced. - Enter the net debit you pay to open the spread. - Set the number of contracts. - Read the result: max profit at the body, max loss, both breakevens, and the profit-zone width. **What it tells you:** how much a butterfly can make if the stock pins the body strike, and the narrow price band where it stays profitable. ## How this calculator works A long butterfly spread is three strikes in one expiration, built from a single option type: a **long option** at the lower strike, **two short options** at the body strike, and a **long option** at the upper strike - the classic 1-2-1 ratio. Because you buy more than you sell, you pay a small **net debit**, and that debit is the most you can lose. You make money only if the stock drifts toward the body strike by expiration. Enter the three strikes and the net debit and the calculator returns the full picture. **Max profit** is the wing width minus the debit, times 100 per contract, kept only if the stock pins the body strike. **Max loss** is the whole debit, paid if the stock finishes at or beyond either outer strike. The **two breakevens** are the lower strike plus the debit and the upper strike minus the debit. The payoff diagram shows the tent shape: a single peak at the body, sloping down to a flat, capped loss on each side. ## Butterfly spread vs iron butterfly They are the same payoff seen from two sides. The long butterfly here is a **debit** trade in one option type - you pay to open it and profit if the stock pins the body. The iron butterfly is a **credit** trade using a call spread and a put spread together - you are paid to open it and keep the credit if the stock pins the body. The tent shape, the single profit peak and the capped loss are the same; for matching strikes the risk and reward are effectively identical, so most traders simply open whichever one fills at a better price. ## Worked example A fixed, hypothetical illustration - not live market data. A hypothetical stock trades at $100. With 30 days to expiration you buy the $95 call, sell two $100 calls and buy the $105 call for a $2.00 net debit. Both wings are $5 wide. - Max profit: ($5 - $2.00) × 100 = $300 per contract (only if the stock pins $100). - Max loss: $2.00 × 100 = $200 per contract - the whole debit. - Lower breakeven: $95 + $2.00 = $97. Upper breakeven: $105 - $2.00 = $103. - Profit zone: $97 to $103 - $6 wide, or 6% of the price. - Return on risk: $300 ÷ $200 = 150% over 30 days. Found this useful? Get the bi-weekly email Strategy breakdowns, the edge cases these calculators surface, and trades worth watching - free, no noise. Join the free email -> ## ⚠ Common mistakes - Expecting to keep the full max profit. The peak needs the stock to pin the body exactly at expiration - realistically you close early for a fraction of it. - Picking too narrow a body for a moving stock. The narrow profit zone is breached easily; match the body to the expected move. - Buying a butterfly when IV is low. A long butterfly is short vega - it gains as IV falls, so enter when IV is elevated and likely to cool, not when it is already cheap with nothing left to give back. Check the IV Rank first. - Forgetting the four-contract commissions. A 1-2-1 butterfly opens four contracts and can close four more - material against a small debit. - Running unequal wings by accident. Equal wings keep the loss symmetric; unequal wings are a different, broken-wing butterfly with a different risk profile - often opened for a credit with risk on only one side. ## Frequently asked questions What is a butterfly spread? A long butterfly spread is a three-strike, defined-risk debit trade built from one option type: buy one lower-strike option, sell two body-strike options, and buy one upper-strike option, all in the same expiration with equally spaced strikes. You pay a small net debit and profit most when the stock pins the body strike at expiration. It is the long-premium mirror of the iron butterfly. When should I use a long butterfly? When you have a precise view that the stock will pin a specific price by expiration and barely move. The butterfly pays the most at the body strike, and is cheap precisely because that is unlikely - best entered when high implied volatility makes the short body options worth selling. Skip it if you expect a real move: the profit zone is narrow, and a stock past either wing hands you the whole debit. How are max profit and max loss calculated? Max profit = (wing width - net debit) × 100 per contract, realised only if the stock finishes exactly at the body strike. Max loss = the net debit × 100 - the entire amount you paid - which you give up if the stock finishes at or beyond either outer strike. Because you can only ever lose the debit, the butterfly is fully defined-risk. What are the two breakevens? Lower breakeven = lower strike + net debit per share; upper breakeven = upper strike - net debit per share. The trade is profitable anywhere between those two prices, peaking at the body strike, and loses the debit outside them. The profit zone is twice the wing minus twice the debit wide - narrow, which is the cost of the cheap entry. Butterfly spread vs iron butterfly - what is the difference? They have the same tent-shaped payoff and max profit at the body, but opposite construction. The butterfly is a long-premium DEBIT trade using one option type (all calls or all puts); the iron butterfly is a short-premium CREDIT trade using both a call spread and a put spread. So the butterfly costs a debit while the iron butterfly pays a credit. For equal strikes the risk and reward are identical - pick whichever fills better. Call butterfly or put butterfly - which should I use? For equally spaced strikes a long call butterfly and a long put butterfly have an identical profit-and-loss profile, by put-call parity. In practice traders pick the side whose strikes are out-of-the-money for tighter bid-ask spreads and cleaner fills: a call butterfly when the body is at or above the price, a put butterfly when the body is at or below it. This calculator models either - just enter the three strikes and the net debit. Do the two wings have to be equal? This calculator models the standard balanced butterfly, where the lower and upper wings are the same width - so the max loss is the debit on either side. You can trade unequal wings (a broken-wing butterfly), but that changes the risk profile and is often opened for a credit, so it is a different structure. Keep the wings equal here for the numbers to hold.