How are DORM 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 DORM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.60%), the computed maximum profit is $391.77 per contract and the computed maximum loss is -$90.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DORM butterfly?

The breakeven for the DORM butterfly priced on this page is roughly $110.90 and $119.10 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 DORM market-implied 1-standard-deviation expected move is approximately 9.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DORM implied volatility affect this butterfly?

DORM ATM IV is at 32.60% with IV rank near 29.89%, 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.

DORM Butterfly Strategy

DORM (Dorman Products, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.

Dorman Products, Inc. supplies replacement parts and fasteners for passenger cars, light trucks, and medium- and heavy-duty trucks in the automotive aftermarket industry worldwide. It offers original equipment dealer products, such as intake and exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and oil drain plugs, and wheel bolts and lug nuts. The company also provides automotive replacement parts, including door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles, such as lighting, cooling, engine management, wheel hardware, air tanks, and cab products. It offers powertrain products comprising cooling products, harmonic balancers, fluid lines and reservoirs, connectors, 4-wheel drive components, other engine, and transmission and axle components; and chassis products, such as control arms, ball joints, tie-rod ends, brake hardware and hydraulics, axle hardware, suspension arms, knuckles, links, bushings, leaf springs, other suspension, steering, and brake components. The company also provides automotive body products, including window lift motors, switches and handles, wiper, and other interior and exterior automotive body components; and hardware products comprising threaded bolts; automotive and home electrical wiring components; and other hardware assortments and merchandise. It offers its products under the OE Solutions, HELP!, OE FIX, Conduct-Tite, and HD Solutions brands through automotive aftermarket retailers, such as on-line platforms; national, regional, and local warehouse distributors; and specialty markets; salvage yards; local independent parts wholesalers; and mass merchants.

DORM (Dorman Products, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $3.48B, a trailing P/E of 18.48, a beta of 0.97 versus the broader market, a 52-week range of 98.45-166.89, average daily share volume of 281K, a public-listing history dating back to 1991, approximately 4K full-time employees. These structural characteristics shape how DORM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.97 places DORM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a butterfly on DORM?

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 DORM snapshot

As of May 15, 2026, spot at $116.57, ATM IV 32.60%, IV rank 29.89%, expected move 9.35%. The butterfly on DORM 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 DORM specifically: DORM IV at 32.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a DORM butterfly, with a market-implied 1-standard-deviation move of approximately 9.35% (roughly $10.89 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 DORM expiries trade a higher absolute premium for lower per-day decay. Position sizing on DORM should anchor to the underlying notional of $116.57 per share and to the trader's directional view on DORM stock.

DORM butterfly setup

The DORM 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 DORM near $116.57, the first option leg uses a $110.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DORM 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 DORM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$110.00	$9.35
Sell 2	Call	$115.00	$6.10
Buy 1	Call	$120.00	$3.75

DORM butterfly risk and reward

Net Premium / Debit: -$90.00
Max Profit (per contract): $391.77
Max Loss (per contract): -$90.00
Breakeven(s): $110.90, $119.10
Risk / Reward Ratio: 4.353

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.

DORM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on DORM. 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%	-$90.00
$25.78	-77.9%	-$90.00
$51.56	-55.8%	-$90.00
$77.33	-33.7%	-$90.00
$103.10	-11.6%	-$90.00
$128.88	+10.6%	-$90.00
$154.65	+32.7%	-$90.00
$180.42	+54.8%	-$90.00
$206.20	+76.9%	-$90.00
$231.97	+99.0%	-$90.00

When traders use butterfly on DORM

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

DORM thesis for this butterfly

The market-implied 1-standard-deviation range for DORM extends from approximately $105.68 on the downside to $127.46 on the upside. A DORM long call butterfly is a pinning play: it pays maximum at the middle strike if DORM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DORM IV rank near 29.89% 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 DORM at 32.60%. As a Consumer Cyclical name, DORM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DORM-specific events.

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

Frequently asked questions

What is a butterfly on DORM?: A butterfly on DORM is the butterfly strategy applied to DORM (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 DORM stock trading near $116.57, the strikes shown on this page are snapped to the nearest listed DORM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DORM 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 DORM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.60%), the computed maximum profit is $391.77 per contract and the computed maximum loss is -$90.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DORM butterfly?: The breakeven for the DORM butterfly priced on this page is roughly $110.90 and $119.10 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 DORM market-implied 1-standard-deviation expected move is approximately 9.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on DORM?: Butterflies on DORM are pinning bets - traders use them when they expect DORM 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 DORM implied volatility affect this butterfly?: DORM ATM IV is at 32.60% with IV rank near 29.89%, 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.