How are AAOI 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 AAOI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 122.89%), the computed maximum profit is $682.19 per contract and the computed maximum loss is -$55.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AAOI butterfly?

The breakeven for the AAOI butterfly priced on this page is roughly $142.35 and $158.07 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 AAOI market-implied 1-standard-deviation expected move is approximately 35.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AAOI implied volatility affect this butterfly?

AAOI ATM IV is at 122.89% with IV rank near 45.92%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

AAOI Butterfly Strategy

AAOI (Applied Optoelectronics, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Applied Optoelectronics, Inc. (AAOI) is a global technology firm specializing in the creation, production, and distribution of fiber-optic networking solutions. Its extensive product catalog features optical modules, a range of laser components, subassemblies, transceivers, and complete turn-key systems. The company also supplies critical infrastructure hardware such as headend, node, and distribution equipment. AAOI caters to a varied clientele, including internet data center operators, manufacturers of cable television and telecommunications equipment, and internet service providers, utilizing both direct and partner-based sales channels. Founded in 1997, Applied Optoelectronics, Inc. is headquartered in Sugar Land, Texas.

AAOI (Applied Optoelectronics, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $10.89B, a beta of 3.67 versus the broader market, a 52-week range of 18.5-233.67, average daily share volume of 12.9M, a public-listing history dating back to 2013, approximately 3K full-time employees. These structural characteristics shape how AAOI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 3.67 indicates AAOI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on AAOI?

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 AAOI snapshot

As of June 30, 2026, spot at $149.87, ATM IV 122.89%, IV rank 45.92%, expected move 35.23%. The butterfly on AAOI 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 31-day expiry.

Why this butterfly structure on AAOI specifically: AAOI IV at 122.89% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 35.23% (roughly $52.80 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AAOI expiries trade a higher absolute premium for lower per-day decay. Position sizing on AAOI should anchor to the underlying notional of $149.87 per share and to the trader's directional view on AAOI stock.

AAOI butterfly setup

The AAOI 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 AAOI near $149.87, the first option leg uses a $142.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AAOI chain at a 31-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 AAOI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$142.00	$25.15
Sell 2	Call	$150.00	$21.50
Buy 1	Call	$157.50	$18.40

AAOI butterfly risk and reward

Net Premium / Debit: -$55.00
Max Profit (per contract): $682.19
Max Loss (per contract): -$55.00
Breakeven(s): $142.35, $158.07
Risk / Reward Ratio: 12.403

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.

AAOI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AAOI. 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%	-$55.00
$33.15	-77.9%	-$55.00
$66.28	-55.8%	-$55.00
$99.42	-33.7%	-$55.00
$132.55	-11.6%	-$55.00
$165.69	+10.6%	-$5.00
$198.83	+32.7%	-$5.00
$231.96	+54.8%	-$5.00
$265.10	+76.9%	-$5.00
$298.23	+99.0%	-$5.00

When traders use butterfly on AAOI

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

AAOI thesis for this butterfly

The market-implied 1-standard-deviation range for AAOI extends from approximately $97.07 on the downside to $202.67 on the upside. A AAOI long call butterfly is a pinning play: it pays maximum at the middle strike if AAOI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AAOI IV rank near 45.92% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AAOI should anchor more to the directional view and the expected-move geometry. As a Technology name, AAOI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AAOI-specific events.

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

Frequently asked questions

What is a butterfly on AAOI?: A butterfly on AAOI is the butterfly strategy applied to AAOI (stock). 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 AAOI stock trading near $149.87, the strikes shown on this page are snapped to the nearest listed AAOI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AAOI 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 AAOI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 122.89%), the computed maximum profit is $682.19 per contract and the computed maximum loss is -$55.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AAOI butterfly?: The breakeven for the AAOI butterfly priced on this page is roughly $142.35 and $158.07 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 AAOI market-implied 1-standard-deviation expected move is approximately 35.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AAOI?: Butterflies on AAOI are pinning bets - traders use them when they expect AAOI 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 AAOI implied volatility affect this butterfly?: AAOI ATM IV is at 122.89% with IV rank near 45.92%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.