How are CHEF 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 CHEF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.40%), the computed maximum profit is $336.85 per contract and the computed maximum loss is -$147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CHEF butterfly?

The breakeven for the CHEF butterfly priced on this page is roughly $91.48 and $98.53 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 CHEF market-implied 1-standard-deviation expected move is approximately 9.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CHEF implied volatility affect this butterfly?

CHEF ATM IV is at 33.40% with IV rank near 8.30%, 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.

CHEF Butterfly Strategy

CHEF (The Chefs' Warehouse, Inc.), in the Consumer Defensive sector, (Food Distribution industry), listed on NASDAQ.

The Chefs' Warehouse, Inc. (CHEF), operating through its various subsidiaries, focuses on supplying high-end and gourmet food products across both the United States and Canada. The company maintains an extensive catalog, featuring more than 50,000 distinct stock-keeping units. This vast selection encompasses a diverse array of specialty items, such as artisanal charcuterie, premium cheeses, unique oils and vinegars, truffles, caviar, exquisite chocolates, and various pastry essentials. Beyond these niche offerings, Chefs' Warehouse also provides "center-of-the-plate" proteins, including custom-cut beef, fresh seafood, and hormone-free poultry. Their inventory further extends to everyday kitchen staples like cooking oils, butter, eggs, milk, and flour. The company serves a broad spectrum of professional culinary clients, which includes independent restaurants with distinctive menus, fine dining establishments, country clubs, hotels, catering services, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialized food retailers.

CHEF (The Chefs' Warehouse, Inc.) trades in the Consumer Defensive sector, specifically Food Distribution, with a market capitalization of approximately $3.91B, a trailing P/E of 46.84, a beta of 1.44 versus the broader market, a 52-week range of 53.2-97.63, average daily share volume of 492K, a public-listing history dating back to 2011, approximately 5K full-time employees. These structural characteristics shape how CHEF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.44 indicates CHEF has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 46.84 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.

What is a butterfly on CHEF?

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 CHEF snapshot

As of June 30, 2026, spot at $96.29, ATM IV 33.40%, IV rank 8.30%, expected move 9.58%. The butterfly on CHEF 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 CHEF specifically: CHEF IV at 33.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a CHEF butterfly, with a market-implied 1-standard-deviation move of approximately 9.58% (roughly $9.22 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 CHEF expiries trade a higher absolute premium for lower per-day decay. Position sizing on CHEF should anchor to the underlying notional of $96.29 per share and to the trader's directional view on CHEF stock.

CHEF butterfly setup

The CHEF 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 CHEF near $96.29, the first option leg uses a $90.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CHEF 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 CHEF shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$90.00	$7.25
Sell 2	Call	$95.00	$3.55
Buy 1	Call	$100.00	$1.33

CHEF butterfly risk and reward

Net Premium / Debit: -$147.50
Max Profit (per contract): $336.85
Max Loss (per contract): -$147.50
Breakeven(s): $91.48, $98.53
Risk / Reward Ratio: 2.284

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.

CHEF butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CHEF. 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%	-$147.50
$21.30	-77.9%	-$147.50
$42.59	-55.8%	-$147.50
$63.88	-33.7%	-$147.50
$85.17	-11.6%	-$147.50
$106.46	+10.6%	-$147.50
$127.74	+32.7%	-$147.50
$149.03	+54.8%	-$147.50
$170.32	+76.9%	-$147.50
$191.61	+99.0%	-$147.50

When traders use butterfly on CHEF

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

CHEF thesis for this butterfly

The market-implied 1-standard-deviation range for CHEF extends from approximately $87.07 on the downside to $105.51 on the upside. A CHEF long call butterfly is a pinning play: it pays maximum at the middle strike if CHEF settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CHEF IV rank near 8.30% 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 CHEF at 33.40%. As a Consumer Defensive name, CHEF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CHEF-specific events.

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

Frequently asked questions

What is a butterfly on CHEF?: A butterfly on CHEF is the butterfly strategy applied to CHEF (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 CHEF stock trading near $96.29, the strikes shown on this page are snapped to the nearest listed CHEF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CHEF 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 CHEF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.40%), the computed maximum profit is $336.85 per contract and the computed maximum loss is -$147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CHEF butterfly?: The breakeven for the CHEF butterfly priced on this page is roughly $91.48 and $98.53 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 CHEF market-implied 1-standard-deviation expected move is approximately 9.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CHEF?: Butterflies on CHEF are pinning bets - traders use them when they expect CHEF 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 CHEF implied volatility affect this butterfly?: CHEF ATM IV is at 33.40% with IV rank near 8.30%, 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.