How are ALLY 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 ALLY butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.80%), the computed maximum profit is $137.91 per contract and the computed maximum loss is -$42.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALLY butterfly?

The breakeven for the ALLY butterfly priced on this page is roughly $40.43 and $43.58 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 ALLY market-implied 1-standard-deviation expected move is approximately 9.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALLY implied volatility affect this butterfly?

ALLY ATM IV is at 31.80% with IV rank near 11.24%, 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.

ALLY Butterfly Strategy

ALLY (Ally Financial Inc.), in the Financial Services sector, (Financial - Credit Services industry), listed on NYSE.

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services to consumer, commercial, and corporate customers primarily in the United States and Canada. It operates through four segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations. The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers' vehicle inventory.

ALLY (Ally Financial Inc.) trades in the Financial Services sector, specifically Financial - Credit Services, with a market capitalization of approximately $12.79B, a trailing P/E of 9.29, a beta of 1.11 versus the broader market, a 52-week range of 32.502-47.27, average daily share volume of 3.7M, a public-listing history dating back to 2014, approximately 11K full-time employees. These structural characteristics shape how ALLY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.11 places ALLY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.29 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. ALLY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ALLY?

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 ALLY snapshot

As of May 15, 2026, spot at $41.98, ATM IV 31.80%, IV rank 11.24%, expected move 9.12%. The butterfly on ALLY 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 ALLY specifically: ALLY IV at 31.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a ALLY butterfly, with a market-implied 1-standard-deviation move of approximately 9.12% (roughly $3.83 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 ALLY expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALLY should anchor to the underlying notional of $41.98 per share and to the trader's directional view on ALLY stock.

ALLY butterfly setup

The ALLY 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 ALLY near $41.98, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALLY 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 ALLY shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$40.00	$3.03
Sell 2	Call	$42.00	$1.73
Buy 1	Call	$44.00	$0.85

ALLY butterfly risk and reward

Net Premium / Debit: -$42.50
Max Profit (per contract): $137.91
Max Loss (per contract): -$42.50
Breakeven(s): $40.43, $43.58
Risk / Reward Ratio: 3.245

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.

ALLY butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ALLY. 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%	-$42.50
$9.29	-77.9%	-$42.50
$18.57	-55.8%	-$42.50
$27.85	-33.7%	-$42.50
$37.13	-11.5%	-$42.50
$46.41	+10.6%	-$42.50
$55.70	+32.7%	-$42.50
$64.98	+54.8%	-$42.50
$74.26	+76.9%	-$42.50
$83.54	+99.0%	-$42.50

When traders use butterfly on ALLY

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

ALLY thesis for this butterfly

The market-implied 1-standard-deviation range for ALLY extends from approximately $38.15 on the downside to $45.81 on the upside. A ALLY long call butterfly is a pinning play: it pays maximum at the middle strike if ALLY settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ALLY IV rank near 11.24% 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 ALLY at 31.80%. As a Financial Services name, ALLY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALLY-specific events.

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

Frequently asked questions

What is a butterfly on ALLY?: A butterfly on ALLY is the butterfly strategy applied to ALLY (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 ALLY stock trading near $41.98, the strikes shown on this page are snapped to the nearest listed ALLY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ALLY 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 ALLY butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.80%), the computed maximum profit is $137.91 per contract and the computed maximum loss is -$42.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALLY butterfly?: The breakeven for the ALLY butterfly priced on this page is roughly $40.43 and $43.58 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 ALLY market-implied 1-standard-deviation expected move is approximately 9.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ALLY?: Butterflies on ALLY are pinning bets - traders use them when they expect ALLY 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 ALLY implied volatility affect this butterfly?: ALLY ATM IV is at 31.80% with IV rank near 11.24%, 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.