How are CAG 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 CAG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 37.31%), the computed maximum profit is $34.24 per contract and the computed maximum loss is -$12.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CAG butterfly?

The breakeven for the CAG butterfly priced on this page is roughly $13.12 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 CAG market-implied 1-standard-deviation expected move is approximately 10.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CAG implied volatility affect this butterfly?

CAG ATM IV is at 37.31% with IV rank near 67.57%, 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.

CAG Butterfly Strategy

CAG (Conagra Brands, Inc.), in the Consumer Defensive sector, (Packaged Foods industry), listed on NYSE.

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company in North America. The company operates in four segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels in the United States. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels in the United States. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments in the United States.

CAG (Conagra Brands, Inc.) trades in the Consumer Defensive sector, specifically Packaged Foods, with a market capitalization of approximately $6.74B, a beta of -0.03 versus the broader market, a 52-week range of 13.61-23.37, average daily share volume of 14.9M, a public-listing history dating back to 1980, approximately 19K full-time employees. These structural characteristics shape how CAG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -0.03 indicates CAG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CAG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on CAG?

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 CAG snapshot

As of May 15, 2026, spot at $13.46, ATM IV 37.31%, IV rank 67.57%, expected move 10.70%. The butterfly on CAG 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 CAG specifically: CAG IV at 37.31% 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 10.70% (roughly $1.44 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 CAG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CAG should anchor to the underlying notional of $13.46 per share and to the trader's directional view on CAG stock.

CAG butterfly setup

The CAG 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 CAG near $13.46, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CAG 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 CAG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$13.00	$0.88
Sell 2	Call	$13.50	$0.55
Buy 1	Call	$14.00	$0.35

CAG butterfly risk and reward

Net Premium / Debit: -$12.50
Max Profit (per contract): $34.24
Max Loss (per contract): -$12.50
Breakeven(s): $13.12
Risk / Reward Ratio: 2.739

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.

CAG butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CAG. 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	-99.9%	-$12.50
$2.98	-77.8%	-$12.50
$5.96	-55.7%	-$12.50
$8.93	-33.6%	-$12.50
$11.91	-11.5%	-$12.50
$14.88	+10.6%	-$12.50
$17.86	+32.7%	-$12.50
$20.83	+54.8%	-$12.50
$23.81	+76.9%	-$12.50
$26.78	+99.0%	-$12.50

When traders use butterfly on CAG

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

CAG thesis for this butterfly

The market-implied 1-standard-deviation range for CAG extends from approximately $12.02 on the downside to $14.90 on the upside. A CAG long call butterfly is a pinning play: it pays maximum at the middle strike if CAG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CAG IV rank near 67.57% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CAG should anchor more to the directional view and the expected-move geometry. As a Consumer Defensive name, CAG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CAG-specific events.

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

Frequently asked questions

What is a butterfly on CAG?: A butterfly on CAG is the butterfly strategy applied to CAG (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 CAG stock trading near $13.46, the strikes shown on this page are snapped to the nearest listed CAG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CAG 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 CAG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 37.31%), the computed maximum profit is $34.24 per contract and the computed maximum loss is -$12.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CAG butterfly?: The breakeven for the CAG butterfly priced on this page is roughly $13.12 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 CAG market-implied 1-standard-deviation expected move is approximately 10.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CAG?: Butterflies on CAG are pinning bets - traders use them when they expect CAG 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 CAG implied volatility affect this butterfly?: CAG ATM IV is at 37.31% with IV rank near 67.57%, 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.