How are AVGO 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 AVGO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.40%), the computed maximum profit is $1,893.73 per contract and the computed maximum loss is -$532.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AVGO butterfly?

The breakeven for the AVGO butterfly priced on this page is roughly $403.49 and $444.68 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 AVGO market-implied 1-standard-deviation expected move is approximately 15.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AVGO implied volatility affect this butterfly?

AVGO ATM IV is at 55.40% with IV rank near 67.23%, 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.

AVGO Butterfly Strategy

AVGO (Broadcom Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Broadcom, Inc. is a global technology company, which designs, develops and supplies semiconductor and infrastructure software solutions. The company is headquartered in San Jose, California and currently employs 19,000 full-time employees. The firm operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The company offers a range of products that are used in end-products, such as enterprise and data center networking, home connectivity, set-top boxes, telecommunication equipment, smartphones, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Its product portfolio ranges from discrete devices to complex sub-systems that include multiple device types, and also includes firmware for interfacing between analog and digital systems. Its products include mechanical hardware that interfaces with optoelectronic or capacitive sensors.

AVGO (Broadcom Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $1.97T, a trailing P/E of 79.13, a beta of 1.44 versus the broader market, a 52-week range of 221.6-437.68, average daily share volume of 24.1M, a public-listing history dating back to 2009, approximately 37K full-time employees. These structural characteristics shape how AVGO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.44 indicates AVGO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 79.13 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. AVGO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on AVGO?

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 AVGO snapshot

As of May 15, 2026, spot at $426.40, ATM IV 55.40%, IV rank 67.23%, expected move 15.88%. The butterfly on AVGO 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 28-day expiry.

Why this butterfly structure on AVGO specifically: AVGO IV at 55.40% 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 15.88% (roughly $67.73 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AVGO expiries trade a higher absolute premium for lower per-day decay. Position sizing on AVGO should anchor to the underlying notional of $426.40 per share and to the trader's directional view on AVGO stock.

AVGO butterfly setup

The AVGO 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 AVGO near $426.40, the first option leg uses a $405.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AVGO chain at a 28-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 AVGO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$405.00	$39.00
Sell 2	Call	$425.00	$28.13
Buy 1	Call	$450.00	$17.58

AVGO butterfly risk and reward

Net Premium / Debit: -$32.50
Max Profit (per contract): $1,893.73
Max Loss (per contract): -$532.50
Breakeven(s): $403.49, $444.68
Risk / Reward Ratio: 3.556

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.

AVGO butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AVGO. 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%	-$32.50
$94.29	-77.9%	-$32.50
$188.57	-55.8%	-$32.50
$282.84	-33.7%	-$32.50
$377.12	-11.6%	-$32.50
$471.40	+10.6%	-$532.50
$565.68	+32.7%	-$532.50
$659.96	+54.8%	-$532.50
$754.24	+76.9%	-$532.50
$848.51	+99.0%	-$532.50

When traders use butterfly on AVGO

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

AVGO thesis for this butterfly

The market-implied 1-standard-deviation range for AVGO extends from approximately $358.67 on the downside to $494.13 on the upside. A AVGO long call butterfly is a pinning play: it pays maximum at the middle strike if AVGO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AVGO IV rank near 67.23% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AVGO should anchor more to the directional view and the expected-move geometry. As a Technology name, AVGO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AVGO-specific events.

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

Frequently asked questions

What is a butterfly on AVGO?: A butterfly on AVGO is the butterfly strategy applied to AVGO (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 AVGO stock trading near $426.40, the strikes shown on this page are snapped to the nearest listed AVGO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AVGO 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 AVGO butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.40%), the computed maximum profit is $1,893.73 per contract and the computed maximum loss is -$532.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AVGO butterfly?: The breakeven for the AVGO butterfly priced on this page is roughly $403.49 and $444.68 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 AVGO market-implied 1-standard-deviation expected move is approximately 15.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AVGO?: Butterflies on AVGO are pinning bets - traders use them when they expect AVGO 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 AVGO implied volatility affect this butterfly?: AVGO ATM IV is at 55.40% with IV rank near 67.23%, 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.