How are EHC 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 EHC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.60%), the computed maximum profit is $435.80 per contract and the computed maximum loss is -$57.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a EHC butterfly?

The breakeven for the EHC butterfly priced on this page is roughly $100.50 and $109.47 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 EHC 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 EHC implied volatility affect this butterfly?

EHC ATM IV is at 32.60% with IV rank near 47.49%, 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.

EHC Butterfly Strategy

EHC (Encompass Health Corporation), in the Healthcare sector, (Medical - Care Facilities industry), listed on NYSE.

Encompass Health Corporation provides facility-based and home-based post-acute healthcare services in the United States. The company operates in two segments, Inpatient Rehabilitation, and Home Health and Hospice. The Inpatient Rehabilitation segment provides specialized rehabilitative treatment on an inpatient and outpatient basis to patients who are recovering from conditions, such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. The Home Health and Hospice segment provides home health and hospice services primarily in the Southeast and Texas. Its home health services include a range of Medicare-certified home nursing services to adult patients in need of care comprising skilled nursing, medical social work, and home health aide services, as well as physical, occupational, speech therapy, and others. This segment's hospice services comprise in-home services to terminally ill patients and their families.

EHC (Encompass Health Corporation) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $10.66B, a trailing P/E of 17.50, a beta of 0.58 versus the broader market, a 52-week range of 92.77-127.99, average daily share volume of 994K, a public-listing history dating back to 1986, approximately 29K full-time employees. These structural characteristics shape how EHC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.58 indicates EHC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. EHC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on EHC?

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 EHC snapshot

As of May 15, 2026, spot at $106.67, ATM IV 32.60%, IV rank 47.49%, expected move 9.35%. The butterfly on EHC 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 EHC specifically: EHC IV at 32.60% 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 9.35% (roughly $9.97 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 EHC expiries trade a higher absolute premium for lower per-day decay. Position sizing on EHC should anchor to the underlying notional of $106.67 per share and to the trader's directional view on EHC stock.

EHC butterfly setup

The EHC 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 EHC near $106.67, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EHC 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 EHC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$100.00	$8.70
Sell 2	Call	$105.00	$5.35
Buy 1	Call	$110.00	$2.58

EHC butterfly risk and reward

Net Premium / Debit: -$57.50
Max Profit (per contract): $435.80
Max Loss (per contract): -$57.50
Breakeven(s): $100.50, $109.47
Risk / Reward Ratio: 7.579

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.

EHC butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on EHC. 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%	-$57.50
$23.59	-77.9%	-$57.50
$47.18	-55.8%	-$57.50
$70.76	-33.7%	-$57.50
$94.35	-11.6%	-$57.50
$117.93	+10.6%	-$57.50
$141.52	+32.7%	-$57.50
$165.10	+54.8%	-$57.50
$188.68	+76.9%	-$57.50
$212.27	+99.0%	-$57.50

When traders use butterfly on EHC

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

EHC thesis for this butterfly

The market-implied 1-standard-deviation range for EHC extends from approximately $96.70 on the downside to $116.64 on the upside. A EHC long call butterfly is a pinning play: it pays maximum at the middle strike if EHC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current EHC IV rank near 47.49% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on EHC should anchor more to the directional view and the expected-move geometry. As a Healthcare name, EHC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EHC-specific events.

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

Frequently asked questions

What is a butterfly on EHC?: A butterfly on EHC is the butterfly strategy applied to EHC (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 EHC stock trading near $106.67, the strikes shown on this page are snapped to the nearest listed EHC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are EHC 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 EHC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.60%), the computed maximum profit is $435.80 per contract and the computed maximum loss is -$57.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a EHC butterfly?: The breakeven for the EHC butterfly priced on this page is roughly $100.50 and $109.47 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 EHC 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 EHC?: Butterflies on EHC are pinning bets - traders use them when they expect EHC 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 EHC implied volatility affect this butterfly?: EHC ATM IV is at 32.60% with IV rank near 47.49%, 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.