About the Butterfly Spread Calculator
A butterfly spread combines three strikes of the same option type and expiry: buy one lower-strike option, sell two middle-strike options and buy one higher-strike option. A long butterfly costs a small debit and pays most if the stock finishes right at the middle strike, making it a low-cost bet that a stock will stay put. A short butterfly reverses every leg and profits if the stock moves well away from the middle strike.
This butterfly spread calculator is for options traders picking strikes around a price target or an earnings pin. Enter the three strikes and the premium of each option to see the net debit or credit, maximum profit, maximum loss, the lower and upper breakeven prices and the reward-to-risk ratio, along with a payoff chart at expiration.
Broken-wing butterflies (unequal distances between strikes) are supported because the payoff is evaluated leg by leg. Results are at expiration for standard 100-share contracts, excluding commissions and early assignment.
With the default inputs, the maximum profit is $380.00. Change any value above to recalculate instantly.
How to use the butterfly spread calculator
- 1Choose calls or puts and whether you are long or short the butterfly.
- 2Enter the lower, middle and upper strikes, usually equally spaced.
- 3Enter the premium of each option from your broker’s option chain.
- 4Enter how many butterflies you trade.
- 5Check max profit, max loss and the breakeven range on the payoff chart.
Formula and method
A long butterfly is long one K₁ option, short two K₂ options and long one K₃ option. For equal wings, the position is worth nothing below K₁ or above K₃ at expiry, and worth the wing width (K₂ − K₁) at the middle strike, so maximum profit is the width minus the net debit and maximum loss is the debit. The breakevens sit one debit inside each wing.
The calculator evaluates the payoff of every leg at each strike and at the extremes, which also handles broken-wing butterflies, put butterflies and short butterflies (all legs reversed, so profit and loss swap). Breakevens are found where the piecewise-linear payoff crosses zero. Dollar values use 100 shares per contract.
- K₁, K₂, K₃
- Lower, middle and upper strikes
- P₁, P₂, P₃
- Premium of the option at each strike
- D
- Net debit per share for the long butterfly
Worked examples
Long call butterfly 95/100/105
Buying the 95 call ($7.00) and 105 call ($2.20) and selling two 100 calls ($4.00 each) costs $1.20, or $120. If the stock closes at $100 the spread is worth $5, a $380 profit. Breakevens are $95 + $1.20 = $96.20 and $105 − $1.20 = $103.80.
Long put butterfly 180/190/200, 2 spreads
The debit is $2 − 2 × $5 + $10.50 = $2.50, $500 for two butterflies. At $190 the spread is worth the $10 wing width, giving ($10 − $2.50) × 200 = $1,500. Breakevens are $182.50 and $197.50.
Short call butterfly (expecting a big move)
Reversing every leg collects the $1.20 credit ($120), which you keep if the stock ends below $95 or above $105. If it pins $100 you lose $380. The breakevens are unchanged.
Frequently asked questions
When should I use a butterfly spread?+
Use a long butterfly when you expect the stock to finish near a specific price at expiration, such as after earnings or near a large open-interest strike. It risks only a small debit for a potentially much larger payoff if the price pins the middle strike.
What is the max profit on a butterfly spread?+
For a long butterfly with equal wings, maximum profit is the distance between adjacent strikes minus the net debit, earned when the stock closes exactly at the middle strike. With a $5 wing and a $1.20 debit, max profit is $3.80 per share.
Is a call butterfly different from a put butterfly?+
With the same strikes and expiry, call and put butterflies have the same payoff at expiration, and by put-call parity their costs should be nearly identical. Traders pick whichever has better prices or lower assignment risk.
What is a broken-wing butterfly?+
A broken-wing butterfly uses unequal distances between the strikes, for example 95/100/110. It can often be opened for a credit, removing risk on one side while increasing the maximum loss on the other.
Why do butterflies rarely reach max profit?+
Max profit requires the stock to close exactly at the middle strike at expiration. Before expiry the spread is worth much less because of time value, so most traders close butterflies early for a portion of the maximum.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.