CM Butterfly Strategy
CM (Canadian Imperial Bank of Commerce), in the Financial Services sector, (Banks - Diversified industry), listed on NYSE.
Canadian Imperial Bank of Commerce (CIBC) operates as a broad-based financial services provider, extending a wide array of financial offerings and solutions. Its diverse clientele includes individuals, corporations, government entities, and large institutional clients across Canada, the United States, and globally. The bank's operations are structured into four key divisions: Canadian Personal and Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; and Capital Markets. CIBC's product portfolio encompasses checking, savings, and business accounts; mortgage financing; various lending products like general loans, lines of credit, student lines of credit, and specialized business and agricultural loans; investment and insurance services; credit cards; and overdraft protection. Additionally, it delivers everyday banking, credit and borrowing facilities, specialized financial expertise, wealth management and investment advice, and international services.
CM (Canadian Imperial Bank of Commerce) trades in the Financial Services sector, specifically Banks - Diversified, with a market capitalization of approximately $114.66B, a trailing P/E of 16.05, a beta of 1.27 versus the broader market, a 52-week range of 72.58-123.76, average daily share volume of 1.3M, a public-listing history dating back to 1997, approximately 51K full-time employees. These structural characteristics shape how CM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.27 places CM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on CM?
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.
CM snapshot
As of August 14, 2026, spot at $123.50, ATM IV 23.90%, IV rank 7.06%, expected move 6.85%. The butterfly on CM below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this butterfly structure on CM specifically: CM IV at 23.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a CM butterfly, with a market-implied 1-standard-deviation move of approximately 6.85% (roughly $8.46 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CM expiries trade a higher absolute premium for lower per-day decay. Position sizing on CM should anchor to the underlying notional of $123.50 per share and to the trader's directional view on CM stock.
CM butterfly setup
The CM butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With CM at $123.50 on that close, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CM chain at a 35-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 CM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $115.00 | $9.75 |
| Sell 2 | Call | $125.00 | $3.13 |
| Buy 1 | Call | $130.00 | $1.30 |
CM butterfly risk and reward
- Net Premium / Debit
- -$480.00
- Max Profit (per contract)
- $483.33
- Max Loss (per contract)
- -$480.00
- Breakeven(s)
- $119.80
- Risk / Reward Ratio
- 1.007
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.
CM butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on CM. 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% | -$480.00 |
| $27.32 | -77.9% | -$480.00 |
| $54.62 | -55.8% | -$480.00 |
| $81.93 | -33.7% | -$480.00 |
| $109.23 | -11.6% | -$480.00 |
| $136.54 | +10.6% | +$20.00 |
| $163.84 | +32.7% | +$20.00 |
| $191.15 | +54.8% | +$20.00 |
| $218.45 | +76.9% | +$20.00 |
| $245.76 | +99.0% | +$20.00 |
When traders use butterfly on CM
Butterflies on CM are pinning bets - traders use them when they expect CM 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.
CM thesis for this butterfly
The market-implied 1-standard-deviation range for CM extends from approximately $115.04 on the downside to $131.96 on the upside. A CM long call butterfly is a pinning play: it pays maximum at the middle strike if CM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CM IV rank near 7.06% 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 CM at 23.90%. As a Financial Services name, CM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CM-specific events.
CM 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. CM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CM alongside the broader basket even when CM-specific fundamentals are unchanged. Always rebuild the position from current CM chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on CM?
- A butterfly on CM is the butterfly strategy applied to CM (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 CM stock at $123.50 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are CM 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 CM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 23.90%), the computed maximum profit is $483.33 per contract and the computed maximum loss is -$480.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CM butterfly?
- The breakeven for the CM butterfly priced on this page is roughly $119.80 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The CM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.85%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on CM?
- Butterflies on CM are pinning bets - traders use them when they expect CM 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 CM implied volatility affect this butterfly?
- CM ATM IV is at 23.90% with IV rank near 7.06%, 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.