How are BMI 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 BMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 35.40%), the computed maximum profit is $477.80 per contract and the computed maximum loss is -$492.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BMI butterfly?

The breakeven for the BMI butterfly priced on this page is roughly $144.93 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 BMI market-implied 1-standard-deviation expected move is approximately 10.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BMI implied volatility affect this butterfly?

BMI ATM IV is at 35.40% with IV rank near 25.29%, 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.

BMI Butterfly Strategy

BMI (Badger Meter, Inc.), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NYSE.

Badger Meter, Inc. (BMI) provides a comprehensive range of solutions for flow measurement, quality assessment, control, and communication. Operating globally, the company serves markets across North America, Europe, Asia, and the Middle East. For municipal water utilities, BMI supplies both conventional and advanced water meters, complemented by associated radio, software, and service technologies. Additionally, Badger Meter engineers and produces a variety of flow instrumentation devices, including meters, valves, and sensing tools. These instruments are vital for measuring and controlling the flow of various substances—from water, air, and steam to oil and other liquids and gases—within industrial piping and pipelines. They are incorporated by original equipment manufacturers (OEMs) as primary measurement components within their products or systems and distributed through manufacturer representatives.

BMI (Badger Meter, Inc.) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $4.11B, a trailing P/E of 31.52, a beta of 0.68 versus the broader market, a 52-week range of 112.09-249.56, average daily share volume of 611K, a public-listing history dating back to 1983, approximately 2K full-time employees. These structural characteristics shape how BMI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.68 indicates BMI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BMI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on BMI?

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 BMI snapshot

As of June 30, 2026, spot at $148.06, ATM IV 35.40%, IV rank 25.29%, expected move 10.15%. The butterfly on BMI 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 17-day expiry.

Why this butterfly structure on BMI specifically: BMI IV at 35.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a BMI butterfly, with a market-implied 1-standard-deviation move of approximately 10.15% (roughly $15.03 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BMI expiries trade a higher absolute premium for lower per-day decay. Position sizing on BMI should anchor to the underlying notional of $148.06 per share and to the trader's directional view on BMI stock.

BMI butterfly setup

The BMI 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 BMI near $148.06, the first option leg uses a $140.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BMI chain at a 17-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 BMI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$140.00	$10.25
Sell 2	Call	$150.00	$3.45
Buy 1	Call	$155.00	$1.58

BMI butterfly risk and reward

Net Premium / Debit: -$492.50
Max Profit (per contract): $477.80
Max Loss (per contract): -$492.50
Breakeven(s): $144.93
Risk / Reward Ratio: 0.970

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.

BMI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on BMI. 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%	-$492.50
$32.75	-77.9%	-$492.50
$65.48	-55.8%	-$492.50
$98.22	-33.7%	-$492.50
$130.95	-11.6%	-$492.50
$163.69	+10.6%	+$7.50
$196.42	+32.7%	+$7.50
$229.16	+54.8%	+$7.50
$261.90	+76.9%	+$7.50
$294.63	+99.0%	+$7.50

When traders use butterfly on BMI

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

BMI thesis for this butterfly

The market-implied 1-standard-deviation range for BMI extends from approximately $133.03 on the downside to $163.09 on the upside. A BMI long call butterfly is a pinning play: it pays maximum at the middle strike if BMI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current BMI IV rank near 25.29% 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 BMI at 35.40%. As a Technology name, BMI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BMI-specific events.

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

Frequently asked questions

What is a butterfly on BMI?: A butterfly on BMI is the butterfly strategy applied to BMI (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 BMI stock trading near $148.06, the strikes shown on this page are snapped to the nearest listed BMI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are BMI 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 BMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 35.40%), the computed maximum profit is $477.80 per contract and the computed maximum loss is -$492.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BMI butterfly?: The breakeven for the BMI butterfly priced on this page is roughly $144.93 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 BMI market-implied 1-standard-deviation expected move is approximately 10.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on BMI?: Butterflies on BMI are pinning bets - traders use them when they expect BMI 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 BMI implied volatility affect this butterfly?: BMI ATM IV is at 35.40% with IV rank near 25.29%, 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.