How are DSGN 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 DSGN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 72.20%), the computed maximum profit is $52.00 per contract and the computed maximum loss is -$48.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DSGN butterfly?

The breakeven for the DSGN butterfly priced on this page is roughly $14.48 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 DSGN market-implied 1-standard-deviation expected move is approximately 20.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DSGN implied volatility affect this butterfly?

DSGN ATM IV is at 72.20% with IV rank near 6.18%, 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.

DSGN Butterfly Strategy

DSGN (Design Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Design Therapeutics, Inc. is a biopharmaceutical company in the preclinical phase that focuses on creating treatments for genetic conditions stemming from nucleotide repeat expansions. Its current pipeline targets Friedreich's Ataxia (FA), a severe, progressive, monogenic, and autosomal recessive disease. FA primarily impairs mitochondrial function across various organ systems, resulting in neurological, cardiac, and metabolic complications. Another significant area of development is Myotonic Dystrophy Type-1 (DM1). This is a progressive, dominantly inherited monogenic neuromuscular illness that impacts skeletal muscle, the heart, brain, and other bodily systems. Beyond these, the company is advancing its GeneTAC product candidate platform to address an array of other monogenic conditions caused by nucleotide repeat expansions.

DSGN (Design Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $833.8M, a beta of 1.66 versus the broader market, a 52-week range of 3.33-17.25, average daily share volume of 844K, a public-listing history dating back to 2021, approximately 56 full-time employees. These structural characteristics shape how DSGN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.66 indicates DSGN 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 DSGN?

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 DSGN snapshot

As of June 30, 2026, spot at $14.63, ATM IV 72.20%, IV rank 6.18%, expected move 20.70%. The butterfly on DSGN 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 17-day expiry.

Why this butterfly structure on DSGN specifically: DSGN IV at 72.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a DSGN butterfly, with a market-implied 1-standard-deviation move of approximately 20.70% (roughly $3.03 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DSGN expiries trade a higher absolute premium for lower per-day decay. Position sizing on DSGN should anchor to the underlying notional of $14.63 per share and to the trader's directional view on DSGN stock.

DSGN butterfly setup

The DSGN 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 DSGN near $14.63, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DSGN chain at a 17-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 DSGN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$14.00	$1.73
Sell 2	Call	$15.00	$1.25
Buy 1	Call	$15.00	$1.25

DSGN butterfly risk and reward

Net Premium / Debit: -$48.00
Max Profit (per contract): $52.00
Max Loss (per contract): -$48.00
Breakeven(s): $14.48
Risk / Reward Ratio: 1.083

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.

DSGN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on DSGN. 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	-99.9%	-$48.00
$3.24	-77.8%	-$48.00
$6.48	-55.7%	-$48.00
$9.71	-33.6%	-$48.00
$12.94	-11.5%	-$48.00
$16.18	+10.6%	+$52.00
$19.41	+32.7%	+$52.00
$22.65	+54.8%	+$52.00
$25.88	+76.9%	+$52.00
$29.11	+99.0%	+$52.00

When traders use butterfly on DSGN

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

DSGN thesis for this butterfly

The market-implied 1-standard-deviation range for DSGN extends from approximately $11.60 on the downside to $17.66 on the upside. A DSGN long call butterfly is a pinning play: it pays maximum at the middle strike if DSGN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current DSGN IV rank near 6.18% 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 DSGN at 72.20%. As a Healthcare name, DSGN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DSGN-specific events.

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

Frequently asked questions

What is a butterfly on DSGN?: A butterfly on DSGN is the butterfly strategy applied to DSGN (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 DSGN stock trading near $14.63, the strikes shown on this page are snapped to the nearest listed DSGN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DSGN 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 DSGN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 72.20%), the computed maximum profit is $52.00 per contract and the computed maximum loss is -$48.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DSGN butterfly?: The breakeven for the DSGN butterfly priced on this page is roughly $14.48 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 DSGN market-implied 1-standard-deviation expected move is approximately 20.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on DSGN?: Butterflies on DSGN are pinning bets - traders use them when they expect DSGN 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 DSGN implied volatility affect this butterfly?: DSGN ATM IV is at 72.20% with IV rank near 6.18%, 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.