How are AES 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 AES butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 7.69%), the computed maximum profit is $21.73 per contract and the computed maximum loss is -$22.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AES butterfly?

The breakeven for the AES butterfly priced on this page is roughly $14.23 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 AES market-implied 1-standard-deviation expected move is approximately 2.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AES implied volatility affect this butterfly?

AES ATM IV is at 7.69% with IV rank near 0.85%, 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.

AES Butterfly Strategy

AES (The AES Corporation), in the Utilities sector, (Diversified Utilities industry), listed on NYSE.

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including coal, gas, hydro, wind, solar, and biomass; and renewables, such as energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,459 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia.

AES (The AES Corporation) trades in the Utilities sector, specifically Diversified Utilities, with a market capitalization of approximately $10.29B, a trailing P/E of 7.71, a beta of 0.96 versus the broader market, a 52-week range of 9.46-17.65, average daily share volume of 13.9M, a public-listing history dating back to 1991, approximately 9K full-time employees. These structural characteristics shape how AES stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.96 places AES roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 7.71 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. AES pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on AES?

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 AES snapshot

As of May 15, 2026, spot at $14.48, ATM IV 7.69%, IV rank 0.85%, expected move 2.21%. The butterfly on AES 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 28-day expiry.

Why this butterfly structure on AES specifically: AES IV at 7.69% is on the cheap side of its 1-year range, which favors premium-buying structures like a AES butterfly, with a market-implied 1-standard-deviation move of approximately 2.21% (roughly $0.32 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 AES expiries trade a higher absolute premium for lower per-day decay. Position sizing on AES should anchor to the underlying notional of $14.48 per share and to the trader's directional view on AES stock.

AES butterfly setup

The AES 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 AES near $14.48, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AES 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 AES shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$14.00	$0.53
Sell 2	Call	$14.50	$0.17
Buy 1	Call	$15.00	$0.03

AES butterfly risk and reward

Net Premium / Debit: -$22.50
Max Profit (per contract): $21.73
Max Loss (per contract): -$22.50
Breakeven(s): $14.23
Risk / Reward Ratio: 0.966

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.

AES butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AES. 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	-99.9%	-$22.50
$3.21	-77.8%	-$22.50
$6.41	-55.7%	-$22.50
$9.61	-33.6%	-$22.50
$12.81	-11.5%	-$22.50
$16.01	+10.6%	-$22.50
$19.21	+32.7%	-$22.50
$22.41	+54.8%	-$22.50
$25.61	+76.9%	-$22.50
$28.81	+99.0%	-$22.50

When traders use butterfly on AES

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

AES thesis for this butterfly

The market-implied 1-standard-deviation range for AES extends from approximately $14.16 on the downside to $14.80 on the upside. A AES long call butterfly is a pinning play: it pays maximum at the middle strike if AES settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AES IV rank near 0.85% 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 AES at 7.69%. As a Utilities name, AES options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AES-specific events.

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

Frequently asked questions

What is a butterfly on AES?: A butterfly on AES is the butterfly strategy applied to AES (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 AES stock trading near $14.48, the strikes shown on this page are snapped to the nearest listed AES chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AES 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 AES butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 7.69%), the computed maximum profit is $21.73 per contract and the computed maximum loss is -$22.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AES butterfly?: The breakeven for the AES butterfly priced on this page is roughly $14.23 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 AES market-implied 1-standard-deviation expected move is approximately 2.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AES?: Butterflies on AES are pinning bets - traders use them when they expect AES 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 AES implied volatility affect this butterfly?: AES ATM IV is at 7.69% with IV rank near 0.85%, 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.