How are DGX 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 DGX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.00%), the computed maximum profit is $548.22 per contract and the computed maximum loss is -$395.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DGX butterfly?

The breakeven for the DGX butterfly priced on this page is roughly $191.05 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 DGX market-implied 1-standard-deviation expected move is approximately 6.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DGX implied volatility affect this butterfly?

DGX ATM IV is at 24.00% with IV rank near 39.09%, 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.

DGX Butterfly Strategy

DGX (Quest Diagnostics Incorporated), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NYSE.

Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine testing, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to patients, clinicians, hospitals, independent delivery networks, health plans, employers, direct contract entities, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians robust information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

DGX (Quest Diagnostics Incorporated) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $21.13B, a trailing P/E of 20.50, a beta of 0.60 versus the broader market, a 52-week range of 164.65-213.5, average daily share volume of 911K, a public-listing history dating back to 1996, approximately 55K full-time employees. These structural characteristics shape how DGX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

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

What is a butterfly on DGX?

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 DGX snapshot

As of May 15, 2026, spot at $187.25, ATM IV 24.00%, IV rank 39.09%, expected move 6.88%. The butterfly on DGX 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 DGX specifically: DGX IV at 24.00% 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 6.88% (roughly $12.88 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 DGX expiries trade a higher absolute premium for lower per-day decay. Position sizing on DGX should anchor to the underlying notional of $187.25 per share and to the trader's directional view on DGX stock.

DGX butterfly setup

The DGX 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 DGX near $187.25, the first option leg uses a $180.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DGX 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 DGX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$180.00	$10.40
Sell 2	Call	$185.00	$7.10
Buy 1	Call	$195.00	$2.75

DGX butterfly risk and reward

Net Premium / Debit: +$105.00
Max Profit (per contract): $548.22
Max Loss (per contract): -$395.00
Breakeven(s): $191.05
Risk / Reward Ratio: 1.388

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.

DGX butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on DGX. 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%	+$105.00
$41.41	-77.9%	+$105.00
$82.81	-55.8%	+$105.00
$124.21	-33.7%	+$105.00
$165.61	-11.6%	+$105.00
$207.01	+10.6%	-$395.00
$248.42	+32.7%	-$395.00
$289.82	+54.8%	-$395.00
$331.22	+76.9%	-$395.00
$372.62	+99.0%	-$395.00

When traders use butterfly on DGX

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

DGX thesis for this butterfly

The market-implied 1-standard-deviation range for DGX extends from approximately $174.37 on the downside to $200.13 on the upside. A DGX long call butterfly is a pinning play: it pays maximum at the middle strike if DGX settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DGX IV rank near 39.09% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on DGX should anchor more to the directional view and the expected-move geometry. As a Healthcare name, DGX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DGX-specific events.

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

Frequently asked questions

What is a butterfly on DGX?: A butterfly on DGX is the butterfly strategy applied to DGX (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 DGX stock trading near $187.25, the strikes shown on this page are snapped to the nearest listed DGX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DGX 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 DGX butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.00%), the computed maximum profit is $548.22 per contract and the computed maximum loss is -$395.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DGX butterfly?: The breakeven for the DGX butterfly priced on this page is roughly $191.05 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 DGX market-implied 1-standard-deviation expected move is approximately 6.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on DGX?: Butterflies on DGX are pinning bets - traders use them when they expect DGX 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 DGX implied volatility affect this butterfly?: DGX ATM IV is at 24.00% with IV rank near 39.09%, 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.