How are ADI 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 ADI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 52.94%), the computed maximum profit is $1,612.27 per contract and the computed maximum loss is -$340.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ADI butterfly?

The breakeven for the ADI butterfly priced on this page is roughly $383.40 and $416.61 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 ADI market-implied 1-standard-deviation expected move is approximately 15.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ADI implied volatility affect this butterfly?

ADI ATM IV is at 52.94% with IV rank near 91.99%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

ADI Butterfly Strategy

ADI (Analog Devices, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Analog Devices, Inc. (ADI) is a technology leader specializing in the conception, production, validation, and global marketing of integrated circuits (ICs), software solutions, and advanced subsystems. Their offerings leverage sophisticated analog, mixed-signal, and digital signal processing technologies. The company's comprehensive product lineup features data converters, which are critical for transforming real-world analog signals into digital data and subsequently converting digital data back into analog signals. They also provide power management and reference devices, essential for power conversion, driver supervision, system sequencing, and energy optimization in industries such as automotive, telecommunications, industrial applications, and premium consumer markets. These power ICs are supported by integrated performance, integration, and software design simulation tools for precise power supply development. ADI's portfolio further includes high-performance amplifiers, designed for conditioning analog signals, as well as radio frequency (RF) and microwave ICs that underpin cellular infrastructure.

ADI (Analog Devices, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $188.46B, a trailing P/E of 56.94, a beta of 1.18 versus the broader market, a 52-week range of 218.37-445.91, average daily share volume of 4.4M, a public-listing history dating back to 1980, approximately 24K full-time employees. These structural characteristics shape how ADI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.18 places ADI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 56.94 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ADI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ADI?

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 ADI snapshot

As of June 30, 2026, spot at $398.47, ATM IV 52.94%, IV rank 91.99%, expected move 15.18%. The butterfly on ADI 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 ADI specifically: ADI IV at 52.94% is rich versus its 1-year range, which makes a premium-buying ADI butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 15.18% (roughly $60.48 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 ADI expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADI should anchor to the underlying notional of $398.47 per share and to the trader's directional view on ADI stock.

ADI butterfly setup

The ADI 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 ADI near $398.47, the first option leg uses a $380.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADI 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 ADI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$380.00	$35.35
Sell 2	Call	$400.00	$24.10
Buy 1	Call	$420.00	$16.25

ADI butterfly risk and reward

Net Premium / Debit: -$340.00
Max Profit (per contract): $1,612.27
Max Loss (per contract): -$340.00
Breakeven(s): $383.40, $416.61
Risk / Reward Ratio: 4.742

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.

ADI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ADI. 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%	-$340.00
$88.11	-77.9%	-$340.00
$176.22	-55.8%	-$340.00
$264.32	-33.7%	-$340.00
$352.42	-11.6%	-$340.00
$440.52	+10.6%	-$340.00
$528.63	+32.7%	-$340.00
$616.73	+54.8%	-$340.00
$704.83	+76.9%	-$340.00
$792.94	+99.0%	-$340.00

When traders use butterfly on ADI

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

ADI thesis for this butterfly

The market-implied 1-standard-deviation range for ADI extends from approximately $337.99 on the downside to $458.95 on the upside. A ADI long call butterfly is a pinning play: it pays maximum at the middle strike if ADI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ADI IV rank near 91.99% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on ADI at 52.94%. As a Technology name, ADI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADI-specific events.

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

Frequently asked questions

What is a butterfly on ADI?: A butterfly on ADI is the butterfly strategy applied to ADI (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 ADI stock trading near $398.47, the strikes shown on this page are snapped to the nearest listed ADI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ADI 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 ADI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 52.94%), the computed maximum profit is $1,612.27 per contract and the computed maximum loss is -$340.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ADI butterfly?: The breakeven for the ADI butterfly priced on this page is roughly $383.40 and $416.61 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 ADI market-implied 1-standard-deviation expected move is approximately 15.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ADI?: Butterflies on ADI are pinning bets - traders use them when they expect ADI 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 ADI implied volatility affect this butterfly?: ADI ATM IV is at 52.94% with IV rank near 91.99%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.