How are PJP butterfly max profit and max loss calculated?

Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the PJP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is $368.33 per contract and the computed maximum loss is -$97.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PJP butterfly?

The breakeven for the PJP butterfly priced on this page is roughly $101.97 and $110.03 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current PJP market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PJP implied volatility affect this butterfly?

PJP ATM IV is at 21.90% with IV rank near 19.48%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

PJP Butterfly Strategy

PJP (Invesco Pharmaceuticals ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The Invesco Pharmaceuticals ETF (Fund) is based on the Dynamic Pharmaceutical Intellidex Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value. The Index is comprised of common stocks of 30 US pharmaceuticals companies. These are companies that are principally engaged in the research, development, manufacture, sale or distribution of pharmaceuticals and drugs of all types. The Fund and the Index are rebalanced and reconstituted quarterly in February, May, August and November.

PJP (Invesco Pharmaceuticals ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $339.5M, a beta of 0.51 versus the broader market, a 52-week range of 77.89-110.81, average daily share volume of 27K, a public-listing history dating back to 2005. These structural characteristics shape how PJP etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.51 indicates PJP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PJP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on PJP?

A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.

Current PJP snapshot

As of May 15, 2026, spot at $105.81, ATM IV 21.90%, IV rank 19.48%, expected move 6.28%. The butterfly on PJP below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.

Why this butterfly structure on PJP specifically: PJP IV at 21.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a PJP butterfly, with a market-implied 1-standard-deviation move of approximately 6.28% (roughly $6.64 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PJP expiries trade a higher absolute premium for lower per-day decay. Position sizing on PJP should anchor to the underlying notional of $105.81 per share and to the trader's directional view on PJP etf.

PJP butterfly setup

The PJP butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PJP near $105.81, the first option leg uses a $101.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PJP chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 PJP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$101.00	$5.85
Sell 2	Call	$106.00	$3.20
Buy 1	Call	$111.00	$1.52

PJP butterfly risk and reward

Net Premium / Debit: -$97.00
Max Profit (per contract): $368.33
Max Loss (per contract): -$97.00
Breakeven(s): $101.97, $110.03
Risk / Reward Ratio: 3.797

Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.

PJP butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on PJP. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$97.00
$23.40	-77.9%	-$97.00
$46.80	-55.8%	-$97.00
$70.19	-33.7%	-$97.00
$93.59	-11.6%	-$97.00
$116.98	+10.6%	-$97.00
$140.37	+32.7%	-$97.00
$163.77	+54.8%	-$97.00
$187.16	+76.9%	-$97.00
$210.56	+99.0%	-$97.00

When traders use butterfly on PJP

Butterflies on PJP are pinning bets - traders use them when they expect PJP to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.

PJP thesis for this butterfly

The market-implied 1-standard-deviation range for PJP extends from approximately $99.17 on the downside to $112.45 on the upside. A PJP long call butterfly is a pinning play: it pays maximum at the middle strike if PJP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current PJP IV rank near 19.48% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on PJP at 21.90%. As a Financial Services name, PJP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PJP-specific events.

PJP butterfly positions are structurally neutral / pin (limited-risk, limited-reward); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. PJP positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PJP alongside the broader basket even when PJP-specific fundamentals are unchanged. Always rebuild the position from current PJP chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on PJP?: A butterfly on PJP is the butterfly strategy applied to PJP (etf). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With PJP etf trading near $105.81, the strikes shown on this page are snapped to the nearest listed PJP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PJP butterfly max profit and max loss calculated?: Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the PJP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is $368.33 per contract and the computed maximum loss is -$97.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PJP butterfly?: The breakeven for the PJP butterfly priced on this page is roughly $101.97 and $110.03 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current PJP market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on PJP?: Butterflies on PJP are pinning bets - traders use them when they expect PJP to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
How does current PJP implied volatility affect this butterfly?: PJP ATM IV is at 21.90% with IV rank near 19.48%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.