How are DCO 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 DCO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.80%), the computed maximum profit is $1,106.16 per contract and the computed maximum loss is -$380.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DCO butterfly?

The breakeven for the DCO butterfly priced on this page is roughly $198.80 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 DCO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.56%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DCO implied volatility affect this butterfly?

DCO ATM IV is at 50.80% with IV rank near 46.18%, 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.

DCO Butterfly Strategy

DCO (Ducommun Incorporated), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

Ducommun Incorporated, an established company founded in 1849 and based in Santa Ana, California, specializes in delivering advanced engineering and manufacturing solutions. Primarily, it caters to critical sectors within the United States, such as the aerospace and defense, industrial, and medical fields. The company's operations are divided into two principal segments: Electronic Systems and Structural Systems. The Electronic Systems division produces a wide array of sophisticated components. These offerings encompass various connectivity and wiring solutions like cable assemblies, wire harnesses, and interconnect systems, as well as printed circuit board assemblies and more complex electronic, electromechanical, and mechanical sub-assemblies. This segment also provides lightning diversion systems, radar housings, aircraft electronics racks, shipboard communication and control enclosures, surge suppressors, and conformal shields.

DCO (Ducommun Incorporated) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $3.04B, a beta of 1.05 versus the broader market, a 52-week range of 84.76-210.39, average daily share volume of 263K, a public-listing history dating back to 1973, approximately 2K full-time employees. These structural characteristics shape how DCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.05 places DCO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DCO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on DCO?

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.

DCO snapshot

As of August 14, 2026, spot at $206.74, ATM IV 50.80%, IV rank 46.18%, expected move 14.56%. The butterfly on DCO 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 DCO specifically: DCO IV at 50.80% 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 14.56% (roughly $30.11 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 DCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on DCO should anchor to the underlying notional of $206.74 per share and to the trader's directional view on DCO stock.

DCO butterfly setup

The DCO 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 DCO at $206.74 on that close, the first option leg uses a $195.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DCO 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 DCO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$195.00	$20.75
Sell 2	Call	$210.00	$12.25
Buy 1	Call	$220.00	$7.55

DCO butterfly risk and reward

Net Premium / Debit: -$380.00
Max Profit (per contract): $1,106.16
Max Loss (per contract): -$380.00
Breakeven(s): $198.80
Risk / Reward Ratio: 2.911

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.

DCO butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on DCO. 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%	-$380.00
$45.72	-77.9%	-$380.00
$91.43	-55.8%	-$380.00
$137.14	-33.7%	-$380.00
$182.85	-11.6%	-$380.00
$228.56	+10.6%	+$120.00
$274.27	+32.7%	+$120.00
$319.98	+54.8%	+$120.00
$365.69	+76.9%	+$120.00
$411.40	+99.0%	+$120.00

When traders use butterfly on DCO

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

DCO thesis for this butterfly

The market-implied 1-standard-deviation range for DCO extends from approximately $176.63 on the downside to $236.85 on the upside. A DCO long call butterfly is a pinning play: it pays maximum at the middle strike if DCO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DCO IV rank near 46.18% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on DCO should anchor more to the directional view and the expected-move geometry. As a Industrials name, DCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DCO-specific events.

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

Frequently asked questions

What is a butterfly on DCO?: A butterfly on DCO is the butterfly strategy applied to DCO (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 DCO stock at $206.74 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed DCO chain strike and the premiums come straight from that session's bid/ask midpoint.
How are DCO 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 DCO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.80%), the computed maximum profit is $1,106.16 per contract and the computed maximum loss is -$380.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DCO butterfly?: The breakeven for the DCO butterfly priced on this page is roughly $198.80 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 DCO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.56%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on DCO?: Butterflies on DCO are pinning bets - traders use them when they expect DCO 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 DCO implied volatility affect this butterfly?: DCO ATM IV is at 50.80% with IV rank near 46.18%, 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.