What is the max profit of an iron butterfly?

Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.

What is the max loss of an iron butterfly?

Limited: there is a floor under what it can lose. The calculator gives the figure for your strikes and expiration.

How do I calculate an iron butterfly's profit and loss?

Open the iron butterfly in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.

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Iron butterfly calculator

Neutral. Short the ATM straddle and buy wings to cap risk.

Open in the calculator All strategies

OutlookNeutral

Max profitLimited

Max lossLimited

LevelIntermediate

What is an iron butterfly?

An iron butterfly is a short ATM call and put, plus a long OTM call and put. Profit is largest if the stock pins at A. Both wings limit loss to the remaining width minus the credit.

Legs

Sell a call and put at A
Buy a lower put and higher call

Payoff at expiration, sketched. The live example below has the real prices.

Live example on SPY

Net credit$198.50

Max loss$1.50

Max profit$198.50

Chance of profitLocked: ProUpgrade

BreakevensBetween $754.02 − $757.98At expiration

754P+112/18 · $15.82
756P−112/18 · $16.54
756C−112/18 · $19.20
758C+112/18 · $17.93

SPY · Oct 30, 2026, 3:59 PM ET

With SPY at 755.53, on the Dec 18 expiration (49 days out): buy 1 754 put, sell 1 756 put, sell 1 756 call, and buy 1 758 call. Net credit $198.50. Max profit $198.50; max loss $1.50. Breakevens at expiration: Between $754.02 − $757.98.

Open this iron butterfly in the calculator to move the strikes, change the date and implied volatility, and read profit and loss by price and date.

Questions

What is an iron butterfly?: An iron butterfly is a short ATM call and put, plus a long OTM call and put. Profit is largest if the stock pins at A. Both wings limit loss to the remaining width minus the credit.
When does an iron butterfly make money?: Neutral. Short the ATM straddle and buy wings to cap risk.
What is the max profit of an iron butterfly?: Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.
What is the max loss of an iron butterfly?: Limited: there is a floor under what it can lose. The calculator gives the figure for your strikes and expiration.
How do I calculate an iron butterfly's profit and loss?: Open the iron butterfly in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.