How are DKNG 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 DKNG butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 46.10%), the computed maximum profit is $77.40 per contract and the computed maximum loss is -$17.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DKNG butterfly?

The breakeven for the DKNG butterfly priced on this page is roughly $25.17 and $26.83 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 DKNG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DKNG implied volatility affect this butterfly?

DKNG ATM IV is at 46.10% with IV rank near 25.15%, 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.

DKNG Butterfly Strategy

DKNG (DraftKings Inc.), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NASDAQ.

DraftKings Inc. operates as a leading digital enterprise specializing in sports entertainment and gaming. The company provides sophisticated multi-channel sports betting and gaming technology solutions to operators across 17 countries, facilitating diverse entertainment experiences. Directly, DraftKings manages its own iGaming services under the DraftKings brand in five U.S. states, and separately operates Golden Nugget Online Gaming, another iGaming offering, in three states. Its Sportsbook platform is accessible for both mobile and physical wagers in 18 U.S. states, all in compliance with local regulations. Beyond traditional betting, DraftKings offers its daily fantasy sports product globally in six countries, spanning 15 different sports disciplines. Further diversifying its portfolio, the company has established DraftKings Marketplace, a user-friendly digital collectibles platform featuring curated NFT releases and supporting secondary trading.

DKNG (DraftKings Inc.) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $12.66B, a beta of 1.63 versus the broader market, a 52-week range of 20.46-48.78, average daily share volume of 12.6M, a public-listing history dating back to 2019, approximately 6K full-time employees. These structural characteristics shape how DKNG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.63 indicates DKNG has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on DKNG?

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.

DKNG snapshot

As of August 14, 2026, spot at $26.07, ATM IV 46.10%, IV rank 25.15%, expected move 13.22%. The butterfly on DKNG 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 DKNG specifically: DKNG IV at 46.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a DKNG butterfly, with a market-implied 1-standard-deviation move of approximately 13.22% (roughly $3.45 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 DKNG expiries trade a higher absolute premium for lower per-day decay. Position sizing on DKNG should anchor to the underlying notional of $26.07 per share and to the trader's directional view on DKNG stock.

DKNG butterfly setup

The DKNG 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 DKNG at $26.07 on that close, the first option leg uses a $25.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DKNG 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 DKNG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$25.00	$2.01
Sell 2	Call	$26.00	$1.39
Buy 1	Call	$27.00	$0.95

DKNG butterfly risk and reward

Net Premium / Debit: -$17.00
Max Profit (per contract): $77.40
Max Loss (per contract): -$17.00
Breakeven(s): $25.17, $26.83
Risk / Reward Ratio: 4.553

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.

DKNG butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on DKNG. 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%	-$17.00
$5.77	-77.9%	-$17.00
$11.54	-55.7%	-$17.00
$17.30	-33.6%	-$17.00
$23.06	-11.5%	-$17.00
$28.83	+10.6%	-$17.00
$34.59	+32.7%	-$17.00
$40.35	+54.8%	-$17.00
$46.11	+76.9%	-$17.00
$51.88	+99.0%	-$17.00

When traders use butterfly on DKNG

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

DKNG thesis for this butterfly

The market-implied 1-standard-deviation range for DKNG extends from approximately $22.62 on the downside to $29.52 on the upside. A DKNG long call butterfly is a pinning play: it pays maximum at the middle strike if DKNG settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DKNG IV rank near 25.15% 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 DKNG at 46.10%. As a Consumer Cyclical name, DKNG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DKNG-specific events.

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

Frequently asked questions

What is a butterfly on DKNG?: A butterfly on DKNG is the butterfly strategy applied to DKNG (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 DKNG stock at $26.07 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed DKNG chain strike and the premiums come straight from that session's bid/ask midpoint.
How are DKNG 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 DKNG butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 46.10%), the computed maximum profit is $77.40 per contract and the computed maximum loss is -$17.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DKNG butterfly?: The breakeven for the DKNG butterfly priced on this page is roughly $25.17 and $26.83 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 DKNG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on DKNG?: Butterflies on DKNG are pinning bets - traders use them when they expect DKNG 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 DKNG implied volatility affect this butterfly?: DKNG ATM IV is at 46.10% with IV rank near 25.15%, 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.