How are CVS 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 CVS butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.17%), the computed maximum profit is $397.73 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CVS butterfly?

The breakeven for the CVS butterfly priced on this page is roughly $92.57 and $101.40 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 CVS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CVS implied volatility affect this butterfly?

CVS ATM IV is at 25.17% with IV rank near 11.33%, 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.

CVS Butterfly Strategy

CVS (CVS Health Corp.), in the Healthcare sector, (Medical - Healthcare Plans industry), listed on NYSE.

CVS Health Corp. is a health solutions company, which engages in the provision of healthcare services. It operates through the following segments: Health Care Benefits, Health Services, Pharmacy and Consumer Wellness, and Corporate and Other. The Health Care Benefits segment operates as a health care benefits provider. The Health Services segment offers a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home. The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations. The Corporate and Other Segment is involved in management and administrative expenses.

CVS (CVS Health Corp.) trades in the Healthcare sector, specifically Medical - Healthcare Plans, with a market capitalization of approximately $120.86B, a trailing P/E of 24.64, a beta of 0.60 versus the broader market, a 52-week range of 66.24-110.68, average daily share volume of 8.2M, a public-listing history dating back to 1973, approximately 260K full-time employees. These structural characteristics shape how CVS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.60 indicates CVS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CVS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on CVS?

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.

CVS snapshot

As of August 14, 2026, spot at $97.06, ATM IV 25.17%, IV rank 11.33%, expected move 7.22%. The butterfly on CVS 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 28-day expiry.

Why this butterfly structure on CVS specifically: CVS IV at 25.17% is on the cheap side of its 1-year range, which favors premium-buying structures like a CVS butterfly, with a market-implied 1-standard-deviation move of approximately 7.22% (roughly $7.00 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 CVS expiries trade a higher absolute premium for lower per-day decay. Position sizing on CVS should anchor to the underlying notional of $97.06 per share and to the trader's directional view on CVS stock.

CVS butterfly setup

The CVS 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 CVS at $97.06 on that close, the first option leg uses a $92.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CVS 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 CVS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$92.00	$5.53
Sell 2	Call	$97.00	$2.95
Buy 1	Call	$102.00	$0.98

CVS butterfly risk and reward

Net Premium / Debit: -$60.00
Max Profit (per contract): $397.73
Max Loss (per contract): -$60.00
Breakeven(s): $92.57, $101.40
Risk / Reward Ratio: 6.629

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.

CVS butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on CVS. 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%	-$60.00
$21.47	-77.9%	-$60.00
$42.93	-55.8%	-$60.00
$64.39	-33.7%	-$60.00
$85.85	-11.6%	-$60.00
$107.31	+10.6%	-$60.00
$128.77	+32.7%	-$60.00
$150.23	+54.8%	-$60.00
$171.69	+76.9%	-$60.00
$193.14	+99.0%	-$60.00

When traders use butterfly on CVS

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

CVS thesis for this butterfly

The market-implied 1-standard-deviation range for CVS extends from approximately $90.06 on the downside to $104.06 on the upside. A CVS long call butterfly is a pinning play: it pays maximum at the middle strike if CVS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current CVS IV rank near 11.33% 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 CVS at 25.17%. As a Healthcare name, CVS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CVS-specific events.

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

Frequently asked questions

What is a butterfly on CVS?: A butterfly on CVS is the butterfly strategy applied to CVS (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 CVS stock at $97.06 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CVS chain strike and the premiums come straight from that session's bid/ask midpoint.
How are CVS 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 CVS butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.17%), the computed maximum profit is $397.73 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CVS butterfly?: The breakeven for the CVS butterfly priced on this page is roughly $92.57 and $101.40 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 CVS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on CVS?: Butterflies on CVS are pinning bets - traders use them when they expect CVS 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 CVS implied volatility affect this butterfly?: CVS ATM IV is at 25.17% with IV rank near 11.33%, 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.