How are XRT 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 XRT butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 21.87%), the computed maximum profit is $253.26 per contract and the computed maximum loss is -$155.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a XRT butterfly?

The breakeven for the XRT butterfly priced on this page is roughly $86.06 and $91.95 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The XRT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.27%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current XRT implied volatility affect this butterfly?

XRT ATM IV is at 21.87% with IV rank near 20.32%, 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.

XRT Butterfly Strategy

XRT (State Street SPDR S&P Retail ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.

The State Street SPDR S&P Retail ETF (XRT) is designed to replicate, before fees and expenses, the overall investment performance of the S&P Retail Select Industry Index. This fund offers investors focused access to the comprehensive retail segment of the S&P Total Market Index (TMI). It covers a broad spectrum of retail activities, including, but not limited to, Apparel, Automotive, Broadline, Computer & Electronic, Consumer Staples Merchandise, Drug, Food, and Other Specialty Retailers. The ETF achieves its objective by tracking an index that employs a modified equal-weighting methodology, ensuring diversified exposure across large, mid, and small-capitalization companies within the retail sector. This structure enables investors to implement more precise strategic or tactical allocations within retail, offering greater specificity than traditional, broader sector-based investment options.

XRT (State Street SPDR S&P Retail ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $377.9M, a beta of 1.17 versus the broader market, a 52-week range of 77.24-93.52, average daily share volume of 5.0M, a public-listing history dating back to 2006. These structural characteristics shape how XRT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.17 places XRT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XRT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on XRT?

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.

XRT snapshot

As of August 14, 2026, spot at $89.03, ATM IV 21.87%, IV rank 20.32%, expected move 6.27%. The butterfly on XRT below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.

Why this butterfly structure on XRT specifically: XRT IV at 21.87% is on the cheap side of its 1-year range, which favors premium-buying structures like a XRT butterfly, with a market-implied 1-standard-deviation move of approximately 6.27% (roughly $5.58 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated XRT expiries trade a higher absolute premium for lower per-day decay. Position sizing on XRT should anchor to the underlying notional of $89.03 per share and to the trader's directional view on XRT etf.

XRT butterfly setup

The XRT butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With XRT at $89.03 on that close, the first option leg uses a $84.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XRT chain at a 28-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 XRT shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$84.50	$5.40
Sell 2	Call	$89.00	$2.24
Buy 1	Call	$93.50	$0.63

XRT butterfly risk and reward

Net Premium / Debit: -$155.50
Max Profit (per contract): $253.26
Max Loss (per contract): -$155.50
Breakeven(s): $86.06, $91.95
Risk / Reward Ratio: 1.629

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.

XRT butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on XRT. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$155.50
$19.69	-77.9%	-$155.50
$39.38	-55.8%	-$155.50
$59.06	-33.7%	-$155.50
$78.75	-11.6%	-$155.50
$98.43	+10.6%	-$155.50
$118.11	+32.7%	-$155.50
$137.80	+54.8%	-$155.50
$157.48	+76.9%	-$155.50
$177.17	+99.0%	-$155.50

When traders use butterfly on XRT

Butterflies on XRT are pinning bets - traders use them when they expect XRT 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.

XRT thesis for this butterfly

The market-implied 1-standard-deviation range for XRT extends from approximately $83.45 on the downside to $94.61 on the upside. A XRT long call butterfly is a pinning play: it pays maximum at the middle strike if XRT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XRT IV rank near 20.32% 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 XRT at 21.87%. As a Financial Services name, XRT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XRT-specific events.

XRT 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. XRT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XRT alongside the broader basket even when XRT-specific fundamentals are unchanged. Always rebuild the position from current XRT chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on XRT?: A butterfly on XRT is the butterfly strategy applied to XRT (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 XRT etf at $89.03 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed XRT chain strike and the premiums come straight from that session's bid/ask midpoint.
How are XRT 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 XRT butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 21.87%), the computed maximum profit is $253.26 per contract and the computed maximum loss is -$155.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a XRT butterfly?: The breakeven for the XRT butterfly priced on this page is roughly $86.06 and $91.95 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The XRT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.27%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on XRT?: Butterflies on XRT are pinning bets - traders use them when they expect XRT 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 XRT implied volatility affect this butterfly?: XRT ATM IV is at 21.87% with IV rank near 20.32%, 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.