AVY Butterfly Strategy
AVY (Avery Dennison Corporation), in the Consumer Cyclical sector, (Packaging & Containers industry), listed on NYSE.
Avery Dennison Corporation operates as a materials science and digital identification solutions company in the North America, Europe, the Middle East, North Africa, Asia, and Latin America. It offers pressure-sensitive label materials, which consist of papers, plastic films, and metal foils; performance tapes products, including mechanical fasteners, which are precision-extruded and injection-molded plastic devices; and other pressure-sensitive adhesive-based materials and converted products under the Fasson, JAC, and Avery Dennison brands. The company provides graphics and reflective products that include films and other products for the architectural, commercial sign, digital printing, and other related market segments; durable cast and reflective films to the construction, automotive, and fleet transportation markets; sign shops, commercial printers, and designers for pressure-sensitive materials; reflective films for traffic and safety applications; and pressure-sensitive vinyl and specialty materials for digital imaging, screen printing, and sign cutting applications under the Avery Dennison and Mactac brand names. In addition, it offers branding solutions, which include brand embellishments, graphic tickets, tags, labels, and sustainable packaging; information solutions, such as item-level RFID, visibility and loss prevention, price ticketing and marking, productivity and media, and brand protection and security solutions; and shelf-edge productivity and media solutions under the Vestcom brand names, as well as care, content, and country of origin compliance solutions. It serves home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive industries. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990.
AVY (Avery Dennison Corporation) trades in the Consumer Cyclical sector, specifically Packaging & Containers, with a market capitalization of approximately $13.69B, a trailing P/E of 19.47, a beta of 0.81 versus the broader market, a 52-week range of 152.42-199.54, average daily share volume of 738K, a public-listing history dating back to 1973, approximately 35K full-time employees. These structural characteristics shape how AVY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.81 places AVY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AVY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on AVY?
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.
AVY snapshot
As of August 14, 2026, spot at $178.44, ATM IV 21.00%, IV rank 22.94%, expected move 6.02%. The butterfly on AVY below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on AVY specifically: AVY IV at 21.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a AVY butterfly, with a market-implied 1-standard-deviation move of approximately 6.02% (roughly $10.74 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AVY expiries trade a higher absolute premium for lower per-day decay. Position sizing on AVY should anchor to the underlying notional of $178.44 per share and to the trader's directional view on AVY stock.
AVY butterfly setup
The AVY butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With AVY at $178.44 on that close, the first option leg uses a $170.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AVY chain at a 35-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 AVY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $170.00 | $9.95 |
| Sell 2 | Call | $180.00 | $4.25 |
| Buy 1 | Call | $185.00 | $1.55 |
AVY butterfly risk and reward
- Net Premium / Debit
- -$300.00
- Max Profit (per contract)
- $634.17
- Max Loss (per contract)
- -$300.00
- Breakeven(s)
- $173.00
- Risk / Reward Ratio
- 2.114
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.
AVY butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on AVY. 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% | -$300.00 |
| $39.46 | -77.9% | -$300.00 |
| $78.92 | -55.8% | -$300.00 |
| $118.37 | -33.7% | -$300.00 |
| $157.82 | -11.6% | -$300.00 |
| $197.27 | +10.6% | +$200.00 |
| $236.73 | +32.7% | +$200.00 |
| $276.18 | +54.8% | +$200.00 |
| $315.63 | +76.9% | +$200.00 |
| $355.09 | +99.0% | +$200.00 |
When traders use butterfly on AVY
Butterflies on AVY are pinning bets - traders use them when they expect AVY 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.
AVY thesis for this butterfly
The market-implied 1-standard-deviation range for AVY extends from approximately $167.70 on the downside to $189.18 on the upside. A AVY long call butterfly is a pinning play: it pays maximum at the middle strike if AVY settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AVY IV rank near 22.94% 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 AVY at 21.00%. As a Consumer Cyclical name, AVY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AVY-specific events.
AVY 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. AVY positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AVY alongside the broader basket even when AVY-specific fundamentals are unchanged. Always rebuild the position from current AVY chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on AVY?
- A butterfly on AVY is the butterfly strategy applied to AVY (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 AVY stock at $178.44 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed AVY chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are AVY 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 AVY butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 21.00%), the computed maximum profit is $634.17 per contract and the computed maximum loss is -$300.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AVY butterfly?
- The breakeven for the AVY butterfly priced on this page is roughly $173.00 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The AVY market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on AVY?
- Butterflies on AVY are pinning bets - traders use them when they expect AVY 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 AVY implied volatility affect this butterfly?
- AVY ATM IV is at 21.00% with IV rank near 22.94%, 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.