How are CARG 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 CARG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $150.43 per contract and the computed maximum loss is -$35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CARG butterfly?

The breakeven for the CARG butterfly priced on this page is roughly $32.35 and $35.65 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CARG implied volatility affect this butterfly?

CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.

CARG Butterfly Strategy

CARG (CarGurus, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NASDAQ.

CarGurus, Inc., established in Boston, Massachusetts, in 2005, manages a prominent online ecosystem for vehicle transactions, serving both buyers and sellers across the United States and internationally. The company's operations are divided into two main segments: the U.S. Marketplace and Digital Wholesale. Essentially, CarGurus offers an expansive digital automotive marketplace where individuals can search for new and pre-owned vehicle listings from numerous dealerships. Simultaneously, it empowers dealers by linking them with a vast, engaged consumer base and supplying them with practical, data-driven market intelligence. The platform provides an array of specialized features to simplify the car buying and selling journey.

CARG (CarGurus, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $3.19B, a trailing P/E of 20.84, a beta of 1.21 versus the broader market, a 52-week range of 26.39-39.42, average daily share volume of 1.3M, a public-listing history dating back to 2017, approximately 1K full-time employees. These structural characteristics shape how CARG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.21 places CARG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a butterfly on CARG?

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 CARG snapshot

As of June 30, 2026, spot at $33.97, ATM IV 41.10%, IV rank 25.68%, expected move 11.78%. The butterfly on CARG 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 CARG specifically: CARG IV at 41.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a CARG butterfly, with a market-implied 1-standard-deviation move of approximately 11.78% (roughly $4.00 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 CARG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CARG should anchor to the underlying notional of $33.97 per share and to the trader's directional view on CARG stock.

CARG butterfly setup

The CARG 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 CARG near $33.97, the first option leg uses a $32.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CARG 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 CARG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$32.00	$2.38
Sell 2	Call	$34.00	$1.25
Buy 1	Call	$36.00	$0.48

CARG butterfly risk and reward

Net Premium / Debit: -$35.00
Max Profit (per contract): $150.43
Max Loss (per contract): -$35.00
Breakeven(s): $32.35, $35.65
Risk / Reward Ratio: 4.298

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.

CARG butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CARG. 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%	-$35.00
$7.52	-77.9%	-$35.00
$15.03	-55.8%	-$35.00
$22.54	-33.6%	-$35.00
$30.05	-11.5%	-$35.00
$37.56	+10.6%	-$35.00
$45.07	+32.7%	-$35.00
$52.58	+54.8%	-$35.00
$60.09	+76.9%	-$35.00
$67.60	+99.0%	-$35.00

When traders use butterfly on CARG

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

CARG thesis for this butterfly

The market-implied 1-standard-deviation range for CARG extends from approximately $29.97 on the downside to $37.97 on the upside. A CARG long call butterfly is a pinning play: it pays maximum at the middle strike if CARG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CARG IV rank near 25.68% 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 CARG at 41.10%. As a Consumer Cyclical name, CARG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CARG-specific events.

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

Frequently asked questions

What is a butterfly on CARG?: A butterfly on CARG is the butterfly strategy applied to CARG (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 CARG stock trading near $33.97, the strikes shown on this page are snapped to the nearest listed CARG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CARG 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 CARG butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $150.43 per contract and the computed maximum loss is -$35.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CARG butterfly?: The breakeven for the CARG butterfly priced on this page is roughly $32.35 and $35.65 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CARG?: Butterflies on CARG are pinning bets - traders use them when they expect CARG 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 CARG implied volatility affect this butterfly?: CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.