How are GD 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 GD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.76%), the computed maximum profit is $1,335.36 per contract and the computed maximum loss is -$635.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a GD butterfly?

The breakeven for the GD butterfly priced on this page is roughly $336.35 and $363.65 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 GD market-implied 1-standard-deviation expected move is approximately 7.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current GD implied volatility affect this butterfly?

GD ATM IV is at 24.76% with IV rank near 60.19%, 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.

GD Butterfly Strategy

GD (General Dynamics Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

General Dynamics Corporation is a global leader in the aerospace and defense industry, with its operations structured across four key divisions: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment focuses on the design, production, and sale of business jets, alongside offering a full suite of aviation services including aircraft maintenance, repair, management, charter services, and ground support. Marine Systems specializes in shipbuilding for the U.S. Navy, constructing nuclear-powered submarines, surface warships, and auxiliary vessels. This division also builds various commercial ships, such as tankers and cargo carriers. Furthermore, it provides extensive maintenance, modernization, and lifecycle support, along with engineering and design services for both naval and commercial fleets.

GD (General Dynamics Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $93.76B, a trailing P/E of 21.58, a beta of 0.34 versus the broader market, a 52-week range of 289.4-369.7, average daily share volume of 1.4M, a public-listing history dating back to 1978, approximately 110K full-time employees. These structural characteristics shape how GD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.34 indicates GD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. GD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on GD?

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 GD snapshot

As of June 29, 2026, spot at $348.54, ATM IV 24.76%, IV rank 60.19%, expected move 7.10%. The butterfly on GD 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 32-day expiry.

Why this butterfly structure on GD specifically: GD IV at 24.76% 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 7.10% (roughly $24.75 on the underlying). The 32-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GD expiries trade a higher absolute premium for lower per-day decay. Position sizing on GD should anchor to the underlying notional of $348.54 per share and to the trader's directional view on GD stock.

GD butterfly setup

The GD 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 GD near $348.54, the first option leg uses a $330.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GD chain at a 32-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 GD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$330.00	$22.05
Sell 2	Call	$350.00	$10.05
Buy 1	Call	$365.00	$4.40

GD butterfly risk and reward

Net Premium / Debit: -$635.00
Max Profit (per contract): $1,335.36
Max Loss (per contract): -$635.00
Breakeven(s): $336.35, $363.65
Risk / Reward Ratio: 2.103

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.

GD butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on GD. 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%	-$635.00
$77.07	-77.9%	-$635.00
$154.14	-55.8%	-$635.00
$231.20	-33.7%	-$635.00
$308.26	-11.6%	-$635.00
$385.33	+10.6%	-$135.00
$462.39	+32.7%	-$135.00
$539.45	+54.8%	-$135.00
$616.51	+76.9%	-$135.00
$693.58	+99.0%	-$135.00

When traders use butterfly on GD

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

GD thesis for this butterfly

The market-implied 1-standard-deviation range for GD extends from approximately $323.79 on the downside to $373.29 on the upside. A GD long call butterfly is a pinning play: it pays maximum at the middle strike if GD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GD IV rank near 60.19% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on GD should anchor more to the directional view and the expected-move geometry. As a Industrials name, GD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GD-specific events.

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

Frequently asked questions

What is a butterfly on GD?: A butterfly on GD is the butterfly strategy applied to GD (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 GD stock trading near $348.54, the strikes shown on this page are snapped to the nearest listed GD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are GD 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 GD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.76%), the computed maximum profit is $1,335.36 per contract and the computed maximum loss is -$635.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a GD butterfly?: The breakeven for the GD butterfly priced on this page is roughly $336.35 and $363.65 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 GD market-implied 1-standard-deviation expected move is approximately 7.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on GD?: Butterflies on GD are pinning bets - traders use them when they expect GD 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 GD implied volatility affect this butterfly?: GD ATM IV is at 24.76% with IV rank near 60.19%, 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.