How are BHC 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 BHC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 56.16%), the computed maximum profit is $28.25 per contract and the computed maximum loss is -$21.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BHC butterfly?

The breakeven for the BHC butterfly priced on this page is roughly $6.21 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 BHC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 16.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BHC implied volatility affect this butterfly?

BHC ATM IV is at 56.16% with IV rank near 6.53%, 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.

BHC Butterfly Strategy

BHC (Bausch Health Companies Inc.), in the Healthcare sector, (Drug Manufacturers - Specialty & Generic industry), listed on NYSE.

Bausch Health Companies Inc., together with its associated entities, is engaged in the development, manufacturing, and commercialization of a diverse portfolio of pharmaceutical products, medical devices, and over-the-counter remedies. Its primary therapeutic focus areas include ophthalmology, digestive health, and dermatology. The enterprise conducts its operations through five principal divisions: Bausch + Lomb, Salix, International Rx, Ortho Dermatologics, and Diversified Products. The Bausch + Lomb segment is dedicated to vision care, encompassing surgical instruments, consumer eye health products, and ophthalmic pharmaceuticals. Salix specializes in delivering gastroenterology-specific products exclusively within the United States. The International Rx division markets Solta products, a range of branded and generic pharmaceuticals, OTC items, medical devices, and Bausch + Lomb offerings across diverse geographies including Canada, Europe, Asia, Australia, Latin America, Africa, and the Middle East.

BHC (Bausch Health Companies Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $2.32B, a beta of 0.38 versus the broader market, a 52-week range of 4.33-8.69, average daily share volume of 2.8M, a public-listing history dating back to 1994, approximately 20K full-time employees. These structural characteristics shape how BHC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.38 indicates BHC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BHC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on BHC?

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.

BHC snapshot

As of August 14, 2026, spot at $6.47, ATM IV 56.16%, IV rank 6.53%, expected move 16.10%. The butterfly on BHC 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 14-day expiry.

Why this butterfly structure on BHC specifically: BHC IV at 56.16% is on the cheap side of its 1-year range, which favors premium-buying structures like a BHC butterfly, with a market-implied 1-standard-deviation move of approximately 16.10% (roughly $1.04 on the underlying). The 14-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BHC expiries trade a higher absolute premium for lower per-day decay. Position sizing on BHC should anchor to the underlying notional of $6.47 per share and to the trader's directional view on BHC stock.

BHC butterfly setup

The BHC 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 BHC at $6.47 on that close, the first option leg uses a $6.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BHC chain at a 14-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 BHC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$6.00	$0.55
Sell 2	Call	$6.50	$0.20
Buy 1	Call	$7.00	$0.06

BHC butterfly risk and reward

Net Premium / Debit: -$21.00
Max Profit (per contract): $28.25
Max Loss (per contract): -$21.00
Breakeven(s): $6.21
Risk / Reward Ratio: 1.345

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.

BHC butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on BHC. 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	-99.8%	-$21.00
$1.44	-77.8%	-$21.00
$2.87	-55.7%	-$21.00
$4.30	-33.6%	-$21.00
$5.73	-11.5%	-$21.00
$7.16	+10.6%	-$21.00
$8.59	+32.7%	-$21.00
$10.02	+54.8%	-$21.00
$11.45	+76.9%	-$21.00
$12.88	+99.0%	-$21.00

When traders use butterfly on BHC

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

BHC thesis for this butterfly

The market-implied 1-standard-deviation range for BHC extends from approximately $5.43 on the downside to $7.51 on the upside. A BHC long call butterfly is a pinning play: it pays maximum at the middle strike if BHC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BHC IV rank near 6.53% 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 BHC at 56.16%. As a Healthcare name, BHC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BHC-specific events.

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

Frequently asked questions

What is a butterfly on BHC?: A butterfly on BHC is the butterfly strategy applied to BHC (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 BHC stock at $6.47 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed BHC chain strike and the premiums come straight from that session's bid/ask midpoint.
How are BHC 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 BHC butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 56.16%), the computed maximum profit is $28.25 per contract and the computed maximum loss is -$21.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BHC butterfly?: The breakeven for the BHC butterfly priced on this page is roughly $6.21 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 BHC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 16.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on BHC?: Butterflies on BHC are pinning bets - traders use them when they expect BHC 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 BHC implied volatility affect this butterfly?: BHC ATM IV is at 56.16% with IV rank near 6.53%, 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.