How are CPA 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 CPA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 39.00%), the computed maximum profit is $542.57 per contract and the computed maximum loss is -$422.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CPA butterfly?

The breakeven for the CPA butterfly priced on this page is roughly $135.78 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 CPA market-implied 1-standard-deviation expected move is approximately 11.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CPA implied volatility affect this butterfly?

CPA ATM IV is at 39.00% with IV rank near 35.85%, 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.

CPA Butterfly Strategy

CPA (Copa Holdings, S.A.), in the Industrials sector, (Airlines, Airports & Air Services industry), listed on NYSE.

Copa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services. The company offers approximately 204 daily scheduled flights to 69 destinations in 29 countries in North, Central, and South America, as well as the Caribbean from its Panama City hub. As of December 31, 2021, it operated a fleet of 91 aircraft comprising 77 Boeing 737-Next Generation aircraft and 14 Boeing 737 MAX 9 aircraft. Copa Holdings, S.A. was founded in 1947 and is based in Panama City, Panama.

CPA (Copa Holdings, S.A.) trades in the Industrials sector, specifically Airlines, Airports & Air Services, with a market capitalization of approximately $4.74B, a trailing P/E of 7.06, a beta of 0.92 versus the broader market, a 52-week range of 99.32-156.41, average daily share volume of 465K, a public-listing history dating back to 2005, approximately 8K full-time employees. These structural characteristics shape how CPA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.92 places CPA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 7.06 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. CPA pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on CPA?

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 CPA snapshot

As of May 15, 2026, spot at $131.63, ATM IV 39.00%, IV rank 35.85%, expected move 11.18%. The butterfly on CPA 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 CPA specifically: CPA IV at 39.00% 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 11.18% (roughly $14.72 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 CPA expiries trade a higher absolute premium for lower per-day decay. Position sizing on CPA should anchor to the underlying notional of $131.63 per share and to the trader's directional view on CPA stock.

CPA butterfly setup

The CPA 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 CPA near $131.63, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CPA 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 CPA shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$125.00	$9.00
Sell 2	Call	$130.00	$6.35
Buy 1	Call	$140.00	$2.93

CPA butterfly risk and reward

Net Premium / Debit: +$77.50
Max Profit (per contract): $542.57
Max Loss (per contract): -$422.50
Breakeven(s): $135.78
Risk / Reward Ratio: 1.284

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.

CPA butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CPA. 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%	+$77.50
$29.11	-77.9%	+$77.50
$58.22	-55.8%	+$77.50
$87.32	-33.7%	+$77.50
$116.42	-11.6%	+$77.50
$145.53	+10.6%	-$422.50
$174.63	+32.7%	-$422.50
$203.73	+54.8%	-$422.50
$232.83	+76.9%	-$422.50
$261.94	+99.0%	-$422.50

When traders use butterfly on CPA

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

CPA thesis for this butterfly

The market-implied 1-standard-deviation range for CPA extends from approximately $116.91 on the downside to $146.35 on the upside. A CPA long call butterfly is a pinning play: it pays maximum at the middle strike if CPA settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CPA IV rank near 35.85% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on CPA should anchor more to the directional view and the expected-move geometry. As a Industrials name, CPA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CPA-specific events.

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

Frequently asked questions

What is a butterfly on CPA?: A butterfly on CPA is the butterfly strategy applied to CPA (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 CPA stock trading near $131.63, the strikes shown on this page are snapped to the nearest listed CPA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CPA 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 CPA butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 39.00%), the computed maximum profit is $542.57 per contract and the computed maximum loss is -$422.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CPA butterfly?: The breakeven for the CPA butterfly priced on this page is roughly $135.78 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 CPA market-implied 1-standard-deviation expected move is approximately 11.18%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CPA?: Butterflies on CPA are pinning bets - traders use them when they expect CPA 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 CPA implied volatility affect this butterfly?: CPA ATM IV is at 39.00% with IV rank near 35.85%, 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.