How are AFL 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 AFL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 16.35%), the computed maximum profit is $295.66 per contract and the computed maximum loss is -$255.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AFL butterfly?

The breakeven for the AFL butterfly priced on this page is roughly $113.55 and $120.45 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 AFL market-implied 1-standard-deviation expected move is approximately 4.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AFL implied volatility affect this butterfly?

AFL ATM IV is at 16.35% with IV rank near 19.95%, 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.

AFL Butterfly Strategy

AFL (Aflac Incorporated), in the Financial Services sector, (Insurance - Life industry), listed on NYSE.

Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers cancer, medical, nursing care income support, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan. The Aflac U.S. segment provides cancer, accident, short-term disability, critical illness, hospital indemnity, dental, vision, long-term care and disability, and term and whole life insurance products in the United States. It sells its products through sales associates, brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. The company was founded in 1955 and is based in Columbus, Georgia.

AFL (Aflac Incorporated) trades in the Financial Services sector, specifically Insurance - Life, with a market capitalization of approximately $58.78B, a trailing P/E of 12.78, a beta of 0.62 versus the broader market, a 52-week range of 96.95-119.32, average daily share volume of 2.3M, a public-listing history dating back to 1980, approximately 13K full-time employees. These structural characteristics shape how AFL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.62 indicates AFL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. AFL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on AFL?

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 AFL snapshot

As of May 15, 2026, spot at $117.09, ATM IV 16.35%, IV rank 19.95%, expected move 4.69%. The butterfly on AFL 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 AFL specifically: AFL IV at 16.35% is on the cheap side of its 1-year range, which favors premium-buying structures like a AFL butterfly, with a market-implied 1-standard-deviation move of approximately 4.69% (roughly $5.49 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 AFL expiries trade a higher absolute premium for lower per-day decay. Position sizing on AFL should anchor to the underlying notional of $117.09 per share and to the trader's directional view on AFL stock.

AFL butterfly setup

The AFL 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 AFL near $117.09, the first option leg uses a $111.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AFL 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 AFL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$111.00	$5.95
Sell 2	Call	$117.00	$1.93
Buy 1	Call	$123.00	$0.45

AFL butterfly risk and reward

Net Premium / Debit: -$255.00
Max Profit (per contract): $295.66
Max Loss (per contract): -$255.00
Breakeven(s): $113.55, $120.45
Risk / Reward Ratio: 1.159

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.

AFL butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AFL. 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	-100.0%	-$255.00
$25.90	-77.9%	-$255.00
$51.79	-55.8%	-$255.00
$77.67	-33.7%	-$255.00
$103.56	-11.6%	-$255.00
$129.45	+10.6%	-$255.00
$155.34	+32.7%	-$255.00
$181.23	+54.8%	-$255.00
$207.12	+76.9%	-$255.00
$233.00	+99.0%	-$255.00

When traders use butterfly on AFL

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

AFL thesis for this butterfly

The market-implied 1-standard-deviation range for AFL extends from approximately $111.60 on the downside to $122.58 on the upside. A AFL long call butterfly is a pinning play: it pays maximum at the middle strike if AFL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AFL IV rank near 19.95% 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 AFL at 16.35%. As a Financial Services name, AFL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AFL-specific events.

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

Frequently asked questions

What is a butterfly on AFL?: A butterfly on AFL is the butterfly strategy applied to AFL (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 AFL stock trading near $117.09, the strikes shown on this page are snapped to the nearest listed AFL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AFL 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 AFL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 16.35%), the computed maximum profit is $295.66 per contract and the computed maximum loss is -$255.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AFL butterfly?: The breakeven for the AFL butterfly priced on this page is roughly $113.55 and $120.45 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 AFL market-implied 1-standard-deviation expected move is approximately 4.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AFL?: Butterflies on AFL are pinning bets - traders use them when they expect AFL 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 AFL implied volatility affect this butterfly?: AFL ATM IV is at 16.35% with IV rank near 19.95%, 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.