Butterfly Spread Calculator
A long butterfly buys one lower strike, sells two middle strikes and buys one upper, for a small debit and a sharp profit peak at the middle strike. Max loss is the debit; max profit is the wing width minus it. Enter all three strikes to see the peak.
The arithmetic
The default buys the $95 call at $6.00, sells two $100 calls at $3.50, and buys the $105 call at $2.00 — a net debit of $1.00, or $100 per butterfly.
- Max loss = the debit, $100, anywhere at or below $95 or at or above $105.
- Max profit = (wing width − debit) × 100 = (5 − 1) × 100 = $400, exactly at $100.
- Breakevens = $96.00 and $104.00.
- Risk/reward = 4:1, on a target that is a single price.
The best risk/reward in options, with an asterisk
Butterflies routinely show 4:1, 8:1, even 15:1 maximum returns on risk, and that is genuinely what the arithmetic says. The asterisk is that the maximum is a single point, and the probability of landing exactly there is small. The expected value of a butterfly is not its peak; it is the average over where the underlying actually finishes, and most of that distribution sits on the slopes or outside the wings.
Read the chart accordingly. At $102 — a 2% move — the default pays $200 rather than $400. At $104 it pays nothing. The headline ratio describes one price out of a continuum.
The cheapest way to express a precise view
Where a butterfly earns its keep is when you have an unusually specific price target: a stock that has pinned at a strike for weeks, a post-event settle near a large open-interest level, or a fade back to a well-defined mean. Risking $100 to make up to $400 on a view that specific is a reasonable structure. The same $100 spent on a long call buys almost nothing.
Execution is the hidden cost
Four contracts across three strikes means four bid-ask spreads. On a $1.00 debit, paying an extra $0.15 in slippage is 15% of the position's entire cost, and it comes straight off the top. Butterflies only make sense on liquid chains, entered as a single combination order rather than leg by leg. This calculator uses the premiums you type; it does not know what your fills actually were.
Where the 100x multiplier comes from
Product specification, not convention: OCC defines a standard equity option as covering 100 shares, premium quoted in points where one point is $100[1] — so a $1.85 premium costs $185, and every payoff here applies that multiplier to the leg structure.
One exception is worth knowing about: adjusted contracts, covered on the options profit calculator.
Calculating it is the easy half
A butterfly prices out in one line. The payoff is arithmetic — anyone can run it. What it cannot show is whether you believed the trade when you put it on, or are describing a winner picked out of a month of noise.
That is the gap kappi closes: the position committed before the fact, sealed and timestamped on a log nobody can edit afterwards. A screenshot of this chart proves you can use a calculator; a sealed commit proves you took the trade. $15/month, no free tier.
Sources
Frequently asked questions
What is the maximum profit on a butterfly spread?
The wing width minus the net debit, times 100 — and only if the underlying settles exactly at the middle strike. A $95/$100/$105 butterfly costing $1.00 peaks at $400.
What are the breakevens on a butterfly spread?
The lower strike plus the debit, and the upper strike minus it. In the default, $96 and $104.
Why is the quantity on the middle strike two?
A butterfly sells two of the middle strike against one of each wing. That ratio is what creates the peak and keeps the position defined-risk on both sides.
Is the high risk/reward ratio realistic?
The ratio is real but applies at a single price. Expected value depends on the whole distribution of outcomes, most of which pay less than the peak or nothing.