How are ALGN 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 ALGN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.57%), the computed maximum profit is $555.17 per contract and the computed maximum loss is -$380.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALGN butterfly?

The breakeven for the ALGN butterfly priced on this page is roughly $163.80 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 ALGN market-implied 1-standard-deviation expected move is approximately 15.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALGN implied volatility affect this butterfly?

ALGN ATM IV is at 55.57% with IV rank near 59.03%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

ALGN Butterfly Strategy

ALGN (Align Technology, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.

Align Technology, Inc. is a medical technology enterprise that develops, produces, and markets its leading products: Invisalign transparent dental aligners and iTero digital intraoral scanners, along with related services. These offerings serve a wide range of dental professionals, including orthodontists, general dentists, and those specializing in restorative and cosmetic dentistry. The company's operations are divided into two main business units: "Clear Aligner" and "Scanners and Services." The Clear Aligner segment offers a variety of solutions. Its comprehensive products include the full Invisalign treatment for teenage patients, designed to address complex orthodontic needs such as mandibular advancement, patient compliance tracking, and managing tooth eruption. It also features specialized Invisalign First Phase I and Phase 2 packages for younger children, typically aged seven to ten, who have mixed dentition (a combination of primary and permanent teeth). Beyond these, the segment provides non-comprehensive aligner options like Invisalign moderate, lite, express, and Invisalign Go.

ALGN (Align Technology, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $12.78B, a trailing P/E of 29.65, a beta of 1.67 versus the broader market, a 52-week range of 122-208.31, average daily share volume of 1.0M, a public-listing history dating back to 2001, approximately 21K full-time employees. These structural characteristics shape how ALGN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.67 indicates ALGN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on ALGN?

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 ALGN snapshot

As of June 30, 2026, spot at $168.50, ATM IV 55.57%, IV rank 59.03%, expected move 15.93%. The butterfly on ALGN 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 ALGN specifically: ALGN IV at 55.57% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 15.93% (roughly $26.84 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 ALGN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALGN should anchor to the underlying notional of $168.50 per share and to the trader's directional view on ALGN stock.

ALGN butterfly setup

The ALGN 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 ALGN near $168.50, the first option leg uses a $160.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALGN 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 ALGN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$160.00	$16.25
Sell 2	Call	$170.00	$10.45
Buy 1	Call	$175.00	$8.45

ALGN butterfly risk and reward

Net Premium / Debit: -$380.00
Max Profit (per contract): $555.17
Max Loss (per contract): -$380.00
Breakeven(s): $163.80
Risk / Reward Ratio: 1.461

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.

ALGN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ALGN. 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%	-$380.00
$37.27	-77.9%	-$380.00
$74.52	-55.8%	-$380.00
$111.78	-33.7%	-$380.00
$149.03	-11.6%	-$380.00
$186.29	+10.6%	+$120.00
$223.54	+32.7%	+$120.00
$260.80	+54.8%	+$120.00
$298.05	+76.9%	+$120.00
$335.31	+99.0%	+$120.00

When traders use butterfly on ALGN

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

ALGN thesis for this butterfly

The market-implied 1-standard-deviation range for ALGN extends from approximately $141.66 on the downside to $195.34 on the upside. A ALGN long call butterfly is a pinning play: it pays maximum at the middle strike if ALGN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ALGN IV rank near 59.03% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on ALGN should anchor more to the directional view and the expected-move geometry. As a Healthcare name, ALGN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALGN-specific events.

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

Frequently asked questions

What is a butterfly on ALGN?: A butterfly on ALGN is the butterfly strategy applied to ALGN (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 ALGN stock trading near $168.50, the strikes shown on this page are snapped to the nearest listed ALGN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ALGN 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 ALGN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.57%), the computed maximum profit is $555.17 per contract and the computed maximum loss is -$380.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALGN butterfly?: The breakeven for the ALGN butterfly priced on this page is roughly $163.80 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 ALGN market-implied 1-standard-deviation expected move is approximately 15.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ALGN?: Butterflies on ALGN are pinning bets - traders use them when they expect ALGN 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 ALGN implied volatility affect this butterfly?: ALGN ATM IV is at 55.57% with IV rank near 59.03%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.