How are ADP 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 ADP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.35%), the computed maximum profit is $846.99 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ADP butterfly?

The breakeven for the ADP butterfly priced on this page is roughly $216.50 and $233.50 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 ADP market-implied 1-standard-deviation expected move is approximately 8.99%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ADP implied volatility affect this butterfly?

ADP ATM IV is at 31.35% with IV rank near 72.27%, 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.

ADP Butterfly Strategy

ADP (Automatic Data Processing, Inc.), in the Industrials sector, (Staffing & Employment Services industry), listed on NASDAQ.

Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based solutions designed for human capital management (HCM). The company organizes its operations into two primary segments: Employer Services and Professional Employer Organization (PEO). Through its Employer Services division, ADP delivers strategic, cloud-powered platforms and comprehensive human resources (HR) outsourcing. This encompasses a wide array of services such as payroll processing, benefits administration, talent acquisition and management, general HR and workforce management, insurance, retirement planning, and regulatory compliance, often integrated into holistic HCM solutions. Conversely, the Professional Employer Organization (PEO) segment specializes in offering HR outsourcing to small and mid-sized businesses, leveraging a co-employment framework. This segment's offerings span robust benefits packages, regulatory protection and compliance, talent engagement strategies, specialized HR expertise, all-encompassing outsourcing, and even recruitment process outsourcing.

ADP (Automatic Data Processing, Inc.) trades in the Industrials sector, specifically Staffing & Employment Services, with a market capitalization of approximately $89.36B, a trailing P/E of 20.63, a beta of 0.85 versus the broader market, a 52-week range of 188.16-315.98, average daily share volume of 2.9M, a public-listing history dating back to 1980, approximately 64K full-time employees. These structural characteristics shape how ADP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.85 places ADP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ADP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ADP?

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 ADP snapshot

As of June 30, 2026, spot at $223.90, ATM IV 31.35%, IV rank 72.27%, expected move 8.99%. The butterfly on ADP 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 ADP specifically: ADP IV at 31.35% is rich versus its 1-year range, which makes a premium-buying ADP butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 8.99% (roughly $20.13 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 ADP expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADP should anchor to the underlying notional of $223.90 per share and to the trader's directional view on ADP stock.

ADP butterfly setup

The ADP 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 ADP near $223.90, the first option leg uses a $215.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADP 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 ADP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$215.00	$13.95
Sell 2	Call	$225.00	$8.45
Buy 1	Call	$235.00	$4.45

ADP butterfly risk and reward

Net Premium / Debit: -$150.00
Max Profit (per contract): $846.99
Max Loss (per contract): -$150.00
Breakeven(s): $216.50, $233.50
Risk / Reward Ratio: 5.647

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.

ADP butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ADP. 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%	-$150.00
$49.51	-77.9%	-$150.00
$99.02	-55.8%	-$150.00
$148.52	-33.7%	-$150.00
$198.03	-11.6%	-$150.00
$247.53	+10.6%	-$150.00
$297.04	+32.7%	-$150.00
$346.54	+54.8%	-$150.00
$396.05	+76.9%	-$150.00
$445.55	+99.0%	-$150.00

When traders use butterfly on ADP

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

ADP thesis for this butterfly

The market-implied 1-standard-deviation range for ADP extends from approximately $203.77 on the downside to $244.03 on the upside. A ADP long call butterfly is a pinning play: it pays maximum at the middle strike if ADP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ADP IV rank near 72.27% 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 ADP at 31.35%. As a Industrials name, ADP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADP-specific events.

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

Frequently asked questions

What is a butterfly on ADP?: A butterfly on ADP is the butterfly strategy applied to ADP (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 ADP stock trading near $223.90, the strikes shown on this page are snapped to the nearest listed ADP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ADP 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 ADP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.35%), the computed maximum profit is $846.99 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ADP butterfly?: The breakeven for the ADP butterfly priced on this page is roughly $216.50 and $233.50 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 ADP market-implied 1-standard-deviation expected move is approximately 8.99%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ADP?: Butterflies on ADP are pinning bets - traders use them when they expect ADP 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 ADP implied volatility affect this butterfly?: ADP ATM IV is at 31.35% with IV rank near 72.27%, 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.