How are AGM 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 AGM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.10%), the computed maximum profit is $624.47 per contract and the computed maximum loss is -$332.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AGM butterfly?

The breakeven for the AGM butterfly priced on this page is roughly $176.68 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 AGM market-implied 1-standard-deviation expected move is approximately 9.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AGM implied volatility affect this butterfly?

AGM ATM IV is at 32.10% with IV rank near 6.29%, 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.

AGM Butterfly Strategy

AGM (Federal Agricultural Mortgage Corporation), in the Financial Services sector, (Financial - Credit Services industry), listed on NYSE.

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Farm & Ranch, USDA (United States Department of Agriculture) Guarantees, Rural Utilities, and Institutional Credit. The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments (LTSPC) on designated eligible mortgage loans. The USDA Guarantees segment purchases portions of certain agricultural and rural development loans guaranteed by the USDA. The Rural Utilities segment purchases and guarantees securities that are backed by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and purchases eligible rural utilities loans and guarantees of securities backed by those loans, as well as LTSPCs for pools of eligible rural utilities loans. The Institutional Credit segment guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of loans eligible under the Farmer Mac's Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business.

AGM (Federal Agricultural Mortgage Corporation) trades in the Financial Services sector, specifically Financial - Credit Services, with a market capitalization of approximately $1.87B, a trailing P/E of 10.20, a beta of 1.04 versus the broader market, a 52-week range of 136.57-210.64, average daily share volume of 117K, a public-listing history dating back to 1994, approximately 191 full-time employees. These structural characteristics shape how AGM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.04 places AGM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.20 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. AGM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on AGM?

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 AGM snapshot

As of May 15, 2026, spot at $172.16, ATM IV 32.10%, IV rank 6.29%, expected move 9.20%. The butterfly on AGM 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 34-day expiry.

Why this butterfly structure on AGM specifically: AGM IV at 32.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a AGM butterfly, with a market-implied 1-standard-deviation move of approximately 9.20% (roughly $15.84 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AGM expiries trade a higher absolute premium for lower per-day decay. Position sizing on AGM should anchor to the underlying notional of $172.16 per share and to the trader's directional view on AGM stock.

AGM butterfly setup

The AGM 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 AGM near $172.16, the first option leg uses a $165.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AGM chain at a 34-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 AGM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$165.00	$11.15
Sell 2	Call	$170.00	$7.90
Buy 1	Call	$180.00	$2.98

AGM butterfly risk and reward

Net Premium / Debit: +$167.50
Max Profit (per contract): $624.47
Max Loss (per contract): -$332.50
Breakeven(s): $176.68
Risk / Reward Ratio: 1.878

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.

AGM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AGM. 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%	+$167.50
$38.07	-77.9%	+$167.50
$76.14	-55.8%	+$167.50
$114.20	-33.7%	+$167.50
$152.27	-11.6%	+$167.50
$190.33	+10.6%	-$332.50
$228.40	+32.7%	-$332.50
$266.46	+54.8%	-$332.50
$304.53	+76.9%	-$332.50
$342.59	+99.0%	-$332.50

When traders use butterfly on AGM

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

AGM thesis for this butterfly

The market-implied 1-standard-deviation range for AGM extends from approximately $156.32 on the downside to $188.00 on the upside. A AGM long call butterfly is a pinning play: it pays maximum at the middle strike if AGM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AGM IV rank near 6.29% 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 AGM at 32.10%. As a Financial Services name, AGM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AGM-specific events.

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

Frequently asked questions

What is a butterfly on AGM?: A butterfly on AGM is the butterfly strategy applied to AGM (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 AGM stock trading near $172.16, the strikes shown on this page are snapped to the nearest listed AGM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AGM 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 AGM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.10%), the computed maximum profit is $624.47 per contract and the computed maximum loss is -$332.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AGM butterfly?: The breakeven for the AGM butterfly priced on this page is roughly $176.68 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 AGM market-implied 1-standard-deviation expected move is approximately 9.20%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AGM?: Butterflies on AGM are pinning bets - traders use them when they expect AGM 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 AGM implied volatility affect this butterfly?: AGM ATM IV is at 32.10% with IV rank near 6.29%, 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.