How are AMZN 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 AMZN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 39.27%), the computed maximum profit is $958.14 per contract and the computed maximum loss is -$470.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AMZN butterfly?

The breakeven for the AMZN butterfly priced on this page is roughly $229.70 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 AMZN market-implied 1-standard-deviation expected move is approximately 11.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AMZN implied volatility affect this butterfly?

AMZN ATM IV is at 39.27% with IV rank near 58.62%, 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.

AMZN Butterfly Strategy

AMZN (Amazon.com, Inc.), in the Consumer Cyclical sector, (Specialty Retail industry), listed on NASDAQ.

Amazon.com, Inc. operates a vast global retail enterprise, distributing consumer goods and subscription services through both its extensive online platforms and a network of physical stores across North America and internationally. Its operations are structured into three primary segments: North America, International, and Amazon Web Services (AWS). The company's product offerings encompass both merchandise and content procured for direct resale, alongside items sold by third-party merchants on its platform. Furthermore, the company develops and markets its own range of electronic devices, such as Kindle e-readers, Fire tablets and TVs, Ring, Blink, eero, and Echo products. It also invests in the development and production of original media content. Amazon provides various programs designed to enable independent sellers to offer their products, and empowers authors, musicians, filmmakers, Twitch streamers, and app developers to publish and commercialize their content.

AMZN (Amazon.com, Inc.) trades in the Consumer Cyclical sector, specifically Specialty Retail, with a market capitalization of approximately $2.50T, a trailing P/E of 27.53, a beta of 1.44 versus the broader market, a 52-week range of 196-278.56, average daily share volume of 46.8M, a public-listing history dating back to 1997, approximately 1.6M full-time employees. These structural characteristics shape how AMZN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.44 indicates AMZN 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 AMZN?

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 AMZN snapshot

As of June 30, 2026, spot at $238.08, ATM IV 39.27%, IV rank 58.62%, expected move 11.26%. The butterfly on AMZN 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 AMZN specifically: AMZN IV at 39.27% 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 11.26% (roughly $26.80 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 AMZN expiries trade a higher absolute premium for lower per-day decay. Position sizing on AMZN should anchor to the underlying notional of $238.08 per share and to the trader's directional view on AMZN stock.

AMZN butterfly setup

The AMZN 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 AMZN near $238.08, the first option leg uses a $225.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AMZN 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 AMZN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$225.00	$19.58
Sell 2	Call	$240.00	$10.93
Buy 1	Call	$250.00	$6.98

AMZN butterfly risk and reward

Net Premium / Debit: -$470.00
Max Profit (per contract): $958.14
Max Loss (per contract): -$470.00
Breakeven(s): $229.70
Risk / Reward Ratio: 2.039

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.

AMZN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AMZN. 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%	-$470.00
$52.65	-77.9%	-$470.00
$105.29	-55.8%	-$470.00
$157.93	-33.7%	-$470.00
$210.57	-11.6%	-$470.00
$263.21	+10.6%	+$30.00
$315.85	+32.7%	+$30.00
$368.49	+54.8%	+$30.00
$421.13	+76.9%	+$30.00
$473.77	+99.0%	+$30.00

When traders use butterfly on AMZN

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

AMZN thesis for this butterfly

The market-implied 1-standard-deviation range for AMZN extends from approximately $211.28 on the downside to $264.88 on the upside. A AMZN long call butterfly is a pinning play: it pays maximum at the middle strike if AMZN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AMZN IV rank near 58.62% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AMZN should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, AMZN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AMZN-specific events.

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

Frequently asked questions

What is a butterfly on AMZN?: A butterfly on AMZN is the butterfly strategy applied to AMZN (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 AMZN stock trading near $238.08, the strikes shown on this page are snapped to the nearest listed AMZN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AMZN 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 AMZN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 39.27%), the computed maximum profit is $958.14 per contract and the computed maximum loss is -$470.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AMZN butterfly?: The breakeven for the AMZN butterfly priced on this page is roughly $229.70 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 AMZN market-implied 1-standard-deviation expected move is approximately 11.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AMZN?: Butterflies on AMZN are pinning bets - traders use them when they expect AMZN 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 AMZN implied volatility affect this butterfly?: AMZN ATM IV is at 39.27% with IV rank near 58.62%, 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.