How are AMBA 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 AMBA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 73.67%), the computed maximum profit is $220.76 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AMBA butterfly?

The breakeven for the AMBA butterfly priced on this page is roughly $64.60 and $69.40 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 AMBA market-implied 1-standard-deviation expected move is approximately 21.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AMBA implied volatility affect this butterfly?

AMBA ATM IV is at 73.67% with IV rank near 56.57%, 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.

AMBA Butterfly Strategy

AMBA (Ambarella, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Ambarella, Inc. is a global semiconductor company specializing in advanced video processing technology. They develop chips that facilitate high-definition (HD) and ultra-HD (UHD) video compression, sophisticated image manipulation, and cutting-edge deep learning capabilities. Their core offering comprises highly integrated system-on-a-chip (SoC) designs. These single-chip solutions seamlessly combine HD video and image processing, artificial intelligence (AI) computer vision, audio processing, and various system functions, resulting in superior video and image clarity, distinct features, and efficient power usage. Ambarella's technology finds broad application across diverse markets. In the automotive sector, their chips power devices like vehicle dashcams, digital rearview mirrors, advanced driver-assistance systems (ADAS) cameras, interior and driver monitoring systems, and central domain controllers for self-driving vehicles.

AMBA (Ambarella, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $2.73B, a beta of 2.15 versus the broader market, a 52-week range of 48.3-96.69, average daily share volume of 1.2M, a public-listing history dating back to 2012, approximately 941 full-time employees. These structural characteristics shape how AMBA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.15 indicates AMBA 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 AMBA?

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 AMBA snapshot

As of June 29, 2026, spot at $67.14, ATM IV 73.67%, IV rank 56.57%, expected move 21.12%. The butterfly on AMBA 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 32-day expiry.

Why this butterfly structure on AMBA specifically: AMBA IV at 73.67% 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 21.12% (roughly $14.18 on the underlying). The 32-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AMBA expiries trade a higher absolute premium for lower per-day decay. Position sizing on AMBA should anchor to the underlying notional of $67.14 per share and to the trader's directional view on AMBA stock.

AMBA butterfly setup

The AMBA 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 AMBA near $67.14, the first option leg uses a $64.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AMBA chain at a 32-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 AMBA shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$64.00	$7.00
Sell 2	Call	$67.00	$5.40
Buy 1	Call	$70.00	$4.40

AMBA butterfly risk and reward

Net Premium / Debit: -$60.00
Max Profit (per contract): $220.76
Max Loss (per contract): -$60.00
Breakeven(s): $64.60, $69.40
Risk / Reward Ratio: 3.679

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.

AMBA butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AMBA. 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%	-$60.00
$14.85	-77.9%	-$60.00
$29.70	-55.8%	-$60.00
$44.54	-33.7%	-$60.00
$59.39	-11.5%	-$60.00
$74.23	+10.6%	-$60.00
$89.07	+32.7%	-$60.00
$103.92	+54.8%	-$60.00
$118.76	+76.9%	-$60.00
$133.61	+99.0%	-$60.00

When traders use butterfly on AMBA

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

AMBA thesis for this butterfly

The market-implied 1-standard-deviation range for AMBA extends from approximately $52.96 on the downside to $81.32 on the upside. A AMBA long call butterfly is a pinning play: it pays maximum at the middle strike if AMBA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AMBA IV rank near 56.57% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AMBA should anchor more to the directional view and the expected-move geometry. As a Technology name, AMBA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AMBA-specific events.

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

Frequently asked questions

What is a butterfly on AMBA?: A butterfly on AMBA is the butterfly strategy applied to AMBA (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 AMBA stock trading near $67.14, the strikes shown on this page are snapped to the nearest listed AMBA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AMBA 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 AMBA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 73.67%), the computed maximum profit is $220.76 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AMBA butterfly?: The breakeven for the AMBA butterfly priced on this page is roughly $64.60 and $69.40 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 AMBA market-implied 1-standard-deviation expected move is approximately 21.12%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AMBA?: Butterflies on AMBA are pinning bets - traders use them when they expect AMBA 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 AMBA implied volatility affect this butterfly?: AMBA ATM IV is at 73.67% with IV rank near 56.57%, 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.