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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 39.30%), the computed maximum profit is $385.57 per contract and the computed maximum loss is -$65.00 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 $130.65 and $139.35 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 DORM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.27%; 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 39.30% with IV rank near 8.69%, 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. (DORM) is a global supplier within the automotive aftermarket, providing an extensive range of replacement parts and fasteners for passenger vehicles, light trucks, and heavy-duty commercial trucks. Their comprehensive product catalog features components engineered to meet or surpass original equipment (OE) specifications. This includes critical engine parts like intake and exhaust manifolds, EGR coolers, and variable valve timing (VVT) components; sophisticated electronics such as complex modules, tire pressure monitor sensors, and integrated door lock actuators; as well as essential hardware like oil drain plugs and wheel fasteners. They also supply window regulators and radiator fan assemblies. Beyond OE-style parts, Dorman offers a broad array of general automotive replacement items, from door handles and keyless remote systems to hinge repair kits. For heavy-duty vehicles (Class 4-8), their specialized aftermarket components cover lighting, cooling systems, engine management solutions, wheel hardware, air tanks, and cab accessories.

DORM (Dorman Products, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $3.99B, a trailing P/E of 18.20, a beta of 0.98 versus the broader market, a 52-week range of 98.45-166.89, average daily share volume of 293K, 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 0.98 places DORM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DORM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

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.

DORM snapshot

As of August 14, 2026, spot at $135.18, ATM IV 39.30%, IV rank 8.69%, expected move 11.27%. The butterfly on DORM 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 DORM specifically: DORM IV at 39.30% 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 11.27% (roughly $15.23 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 DORM expiries trade a higher absolute premium for lower per-day decay. Position sizing on DORM should anchor to the underlying notional of $135.18 per share and to the trader's directional view on DORM stock.

DORM butterfly setup

The DORM 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 DORM at $135.18 on that close, the first option leg uses a $130.00 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 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 DORM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$130.00	$9.60
Sell 2	Call	$135.00	$6.85
Buy 1	Call	$140.00	$4.75

DORM butterfly risk and reward

Net Premium / Debit: -$65.00
Max Profit (per contract): $385.57
Max Loss (per contract): -$65.00
Breakeven(s): $130.65, $139.35
Risk / Reward Ratio: 5.932

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.

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%	-$65.00
$29.90	-77.9%	-$65.00
$59.79	-55.8%	-$65.00
$89.67	-33.7%	-$65.00
$119.56	-11.6%	-$65.00
$149.45	+10.6%	-$65.00
$179.34	+32.7%	-$65.00
$209.23	+54.8%	-$65.00
$239.11	+76.9%	-$65.00
$269.00	+99.0%	-$65.00

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 $119.95 on the downside to $150.41 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 8.69% 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 39.30%. 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 at $135.18 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed DORM chain strike and the premiums come straight from that session's 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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 39.30%), the computed maximum profit is $385.57 per contract and the computed maximum loss is -$65.00 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 $130.65 and $139.35 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 DORM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.27%; 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 39.30% with IV rank near 8.69%, 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.