How are CLF 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 CLF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 63.46%), the computed maximum profit is $31.71 per contract and the computed maximum loss is -$15.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CLF butterfly?

The breakeven for the CLF butterfly priced on this page is roughly $10.15 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 CLF market-implied 1-standard-deviation expected move is approximately 18.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CLF implied volatility affect this butterfly?

CLF ATM IV is at 63.46% with IV rank near 26.37%, 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.

CLF Butterfly Strategy

CLF (Cleveland-Cliffs Inc.), in the Basic Materials sector, (Steel industry), listed on NYSE.

Cleveland-Cliffs Inc. operates as a flat-rolled steel producer in North America. The company offers carbon steel products, such as hot-rolled, cold-rolled, electrogalvanized, hot-dip galvanized, hot-dip galvannealed, aluminized, enameling, and advanced high-strength steel products; stainless steel products; plates; and grain oriented and non-oriented electrical steel products. It also provides tubular components, including carbon steel, stainless steel, and electric resistance welded tubing. In addition, the company offers tinplate products, such as electrolytic tin coated and chrome coated sheet, and tin mill products; tooling and sampling; raw materials; ingots, rolled blooms, and cast blooms; and hot-briquetted iron products. Further, it owns five iron ore mines in Minnesota and Michigan. The company serves automotive, infrastructure and manufacturing, distributors and converters, and steel producers.

CLF (Cleveland-Cliffs Inc.) trades in the Basic Materials sector, specifically Steel, with a market capitalization of approximately $6.27B, a beta of 2.01 versus the broader market, a 52-week range of 5.63-16.7, average daily share volume of 17.4M, a public-listing history dating back to 1987, approximately 30K full-time employees. These structural characteristics shape how CLF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.01 indicates CLF has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on CLF?

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 CLF snapshot

As of May 15, 2026, spot at $10.27, ATM IV 63.46%, IV rank 26.37%, expected move 18.19%. The butterfly on CLF 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 CLF specifically: CLF IV at 63.46% is on the cheap side of its 1-year range, which favors premium-buying structures like a CLF butterfly, with a market-implied 1-standard-deviation move of approximately 18.19% (roughly $1.87 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 CLF expiries trade a higher absolute premium for lower per-day decay. Position sizing on CLF should anchor to the underlying notional of $10.27 per share and to the trader's directional view on CLF stock.

CLF butterfly setup

The CLF 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 CLF near $10.27, the first option leg uses a $10.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CLF 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 CLF shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$10.00	$0.91
Sell 2	Call	$10.50	$0.61
Buy 1	Call	$11.00	$0.46

CLF butterfly risk and reward

Net Premium / Debit: -$15.00
Max Profit (per contract): $31.71
Max Loss (per contract): -$15.00
Breakeven(s): $10.15
Risk / Reward Ratio: 2.114

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.

CLF butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CLF. 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%	-$15.00
$2.28	-77.8%	-$15.00
$4.55	-55.7%	-$15.00
$6.82	-33.6%	-$15.00
$9.09	-11.5%	-$15.00
$11.36	+10.6%	-$15.00
$13.63	+32.7%	-$15.00
$15.90	+54.8%	-$15.00
$18.17	+76.9%	-$15.00
$20.44	+99.0%	-$15.00

When traders use butterfly on CLF

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

CLF thesis for this butterfly

The market-implied 1-standard-deviation range for CLF extends from approximately $8.40 on the downside to $12.14 on the upside. A CLF long call butterfly is a pinning play: it pays maximum at the middle strike if CLF settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CLF IV rank near 26.37% 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 CLF at 63.46%. As a Basic Materials name, CLF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CLF-specific events.

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

Frequently asked questions

What is a butterfly on CLF?: A butterfly on CLF is the butterfly strategy applied to CLF (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 CLF stock trading near $10.27, the strikes shown on this page are snapped to the nearest listed CLF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CLF 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 CLF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 63.46%), the computed maximum profit is $31.71 per contract and the computed maximum loss is -$15.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CLF butterfly?: The breakeven for the CLF butterfly priced on this page is roughly $10.15 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 CLF market-implied 1-standard-deviation expected move is approximately 18.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CLF?: Butterflies on CLF are pinning bets - traders use them when they expect CLF 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 CLF implied volatility affect this butterfly?: CLF ATM IV is at 63.46% with IV rank near 26.37%, 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.