How are AZO 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 AZO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 30.70%), the computed maximum profit is $11,978.52 per contract and the computed maximum loss is -$3,225.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AZO butterfly?

The breakeven for the AZO butterfly priced on this page is roughly $2,912.25 and $3,167.75 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 AZO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AZO implied volatility affect this butterfly?

AZO ATM IV is at 30.70% with IV rank near 47.45%, 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.

AZO Butterfly Strategy

AZO (AutoZone, Inc.), in the Consumer Cyclical sector, (Specialty Retail industry), listed on NYSE.

AutoZone, Inc. operates as a leading retailer and distributor specializing in automotive replacement parts and accessories. The company's comprehensive inventory caters to a diverse range of vehicles, including cars, sport utility vehicles, vans, and light trucks. Their product offerings encompass both new and remanufactured critical hard parts, essential maintenance items, various accessories, and a selection of non-automotive goods. Key automotive components available include A/C compressors, batteries, bearings, belts, hoses, brake calipers, chassis parts, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting systems, mufflers, radiators, starters, alternators, thermostats, water pumps, and tire repair kits. For vehicle upkeep, AutoZone supplies antifreeze, windshield washer fluid, an extensive array of brake components (drums, rotors, shoes, pads), various automotive fluids (brake, power steering, oil, transmission), oil and fuel additives, and filters for oil, cabin air, engine air, fuel, and transmission. Other maintenance products cover oxygen sensors, paints, refrigerants, shock absorbers, struts, spark plugs, wires, and windshield wipers.

AZO (AutoZone, Inc.) trades in the Consumer Cyclical sector, specifically Specialty Retail, with a market capitalization of approximately $49.38B, a trailing P/E of 20.10, a beta of 0.34 versus the broader market, a 52-week range of 2902.2-4388.11, average daily share volume of 312K, a public-listing history dating back to 1991, approximately 130K full-time employees. These structural characteristics shape how AZO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.34 indicates AZO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a butterfly on AZO?

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.

AZO snapshot

As of August 14, 2026, spot at $3,032.72, ATM IV 30.70%, IV rank 47.45%, expected move 8.80%. The butterfly on AZO 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 AZO specifically: AZO IV at 30.70% 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 8.80% (roughly $266.92 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 AZO expiries trade a higher absolute premium for lower per-day decay. Position sizing on AZO should anchor to the underlying notional of $3,032.72 per share and to the trader's directional view on AZO stock.

AZO butterfly setup

The AZO 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 AZO at $3,032.72 on that close, the first option leg uses a $2,880.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AZO 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 AZO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$2,880.00	$215.40
Sell 2	Call	$3,040.00	$123.90
Buy 1	Call	$3,180.00	$64.65

AZO butterfly risk and reward

Net Premium / Debit: -$3,225.00
Max Profit (per contract): $11,978.52
Max Loss (per contract): -$3,225.00
Breakeven(s): $2,912.25, $3,167.75
Risk / Reward Ratio: 3.714

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.

AZO butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on AZO. 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%	-$3,225.00
$670.56	-77.9%	-$3,225.00
$1,341.11	-55.8%	-$3,225.00
$2,011.66	-33.7%	-$3,225.00
$2,682.21	-11.6%	-$3,225.00
$3,352.76	+10.6%	-$1,225.00
$4,023.31	+32.7%	-$1,225.00
$4,693.86	+54.8%	-$1,225.00
$5,364.41	+76.9%	-$1,225.00
$6,034.96	+99.0%	-$1,225.00

When traders use butterfly on AZO

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

AZO thesis for this butterfly

The market-implied 1-standard-deviation range for AZO extends from approximately $2,765.80 on the downside to $3,299.64 on the upside. A AZO long call butterfly is a pinning play: it pays maximum at the middle strike if AZO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current AZO IV rank near 47.45% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on AZO should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, AZO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AZO-specific events.

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

Frequently asked questions

What is a butterfly on AZO?: A butterfly on AZO is the butterfly strategy applied to AZO (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 AZO stock at $3,032.72 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed AZO chain strike and the premiums come straight from that session's bid/ask midpoint.
How are AZO 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 AZO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 30.70%), the computed maximum profit is $11,978.52 per contract and the computed maximum loss is -$3,225.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AZO butterfly?: The breakeven for the AZO butterfly priced on this page is roughly $2,912.25 and $3,167.75 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 AZO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.80%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on AZO?: Butterflies on AZO are pinning bets - traders use them when they expect AZO 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 AZO implied volatility affect this butterfly?: AZO ATM IV is at 30.70% with IV rank near 47.45%, 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.