How are CDW 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 CDW butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 42.30%), the computed maximum profit is $427.81 per contract and the computed maximum loss is -$55.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CDW butterfly?

The breakeven for the CDW butterfly priced on this page is roughly $95.55 and $104.52 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 CDW market-implied 1-standard-deviation expected move is approximately 12.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CDW implied volatility affect this butterfly?

CDW ATM IV is at 42.30% with IV rank near 52.82%, 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.

CDW Butterfly Strategy

CDW (CDW Corporation), in the Technology sector, (Information Technology Services industry), listed on NASDAQ.

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise, hybrid, and cloud capabilities across data center and networking, digital workspace, and security. Its hardware products comprise notebooks/mobile devices, network communications, desktop computers, video monitors, enterprise and data storage, and others; and software products consists of application suites, security, virtualization, operating systems, and network management. The company also provides advisory and design, software development, implementation, managed, professional, configuration, and telecom services, as well as warranties; mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers.

CDW (CDW Corporation) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $12.83B, a trailing P/E of 12.02, a beta of 1.04 versus the broader market, a 52-week range of 97.12-190.08, average daily share volume of 1.8M, a public-listing history dating back to 2013, approximately 15K full-time employees. These structural characteristics shape how CDW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.04 places CDW roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CDW pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on CDW?

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 CDW snapshot

As of May 15, 2026, spot at $101.70, ATM IV 42.30%, IV rank 52.82%, expected move 12.13%. The butterfly on CDW 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 34-day expiry.

Why this butterfly structure on CDW specifically: CDW IV at 42.30% 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 12.13% (roughly $12.33 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CDW expiries trade a higher absolute premium for lower per-day decay. Position sizing on CDW should anchor to the underlying notional of $101.70 per share and to the trader's directional view on CDW stock.

CDW butterfly setup

The CDW 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 CDW near $101.70, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CDW chain at a 34-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 CDW shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$95.00	$9.05
Sell 2	Call	$100.00	$6.00
Buy 1	Call	$105.00	$3.50

CDW butterfly risk and reward

Net Premium / Debit: -$55.00
Max Profit (per contract): $427.81
Max Loss (per contract): -$55.00
Breakeven(s): $95.55, $104.52
Risk / Reward Ratio: 7.778

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.

CDW butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CDW. 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	-100.0%	-$55.00
$22.50	-77.9%	-$55.00
$44.98	-55.8%	-$55.00
$67.47	-33.7%	-$55.00
$89.95	-11.6%	-$55.00
$112.44	+10.6%	-$55.00
$134.92	+32.7%	-$55.00
$157.41	+54.8%	-$55.00
$179.89	+76.9%	-$55.00
$202.38	+99.0%	-$55.00

When traders use butterfly on CDW

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

CDW thesis for this butterfly

The market-implied 1-standard-deviation range for CDW extends from approximately $89.37 on the downside to $114.03 on the upside. A CDW long call butterfly is a pinning play: it pays maximum at the middle strike if CDW settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CDW IV rank near 52.82% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CDW should anchor more to the directional view and the expected-move geometry. As a Technology name, CDW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CDW-specific events.

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

Frequently asked questions

What is a butterfly on CDW?: A butterfly on CDW is the butterfly strategy applied to CDW (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 CDW stock trading near $101.70, the strikes shown on this page are snapped to the nearest listed CDW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CDW 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 CDW butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 42.30%), the computed maximum profit is $427.81 per contract and the computed maximum loss is -$55.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CDW butterfly?: The breakeven for the CDW butterfly priced on this page is roughly $95.55 and $104.52 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 CDW market-implied 1-standard-deviation expected move is approximately 12.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CDW?: Butterflies on CDW are pinning bets - traders use them when they expect CDW 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 CDW implied volatility affect this butterfly?: CDW ATM IV is at 42.30% with IV rank near 52.82%, 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.