How are GHM 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 GHM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 64.10%), the computed maximum profit is $371.88 per contract and the computed maximum loss is -$120.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a GHM butterfly?

The breakeven for the GHM butterfly priced on this page is roughly $96.20 and $103.80 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 GHM market-implied 1-standard-deviation expected move is approximately 18.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current GHM implied volatility affect this butterfly?

GHM ATM IV is at 64.10% with IV rank near 31.72%, 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.

GHM Butterfly Strategy

GHM (Graham Corporation), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.

Graham Corporation, together with its subsidiaries, designs and manufactures fluid, power, heat transfer, and vacuum equipment for chemical and petrochemical processing, defense, space, petroleum refining, cryogenic, energy, and other industries. It offers power plant systems comprising ejectors and surface condensers; torpedo ejection and power systems, such as turbines, alternators, regulators, pumps, and blowers; and thermal management systems, including pumps, blowers, and electronics. The company also provides rocket propulsion systems, such as turbopumps and fuel pumps; cooling systems comprising pumps, compressors, fans, and blowers; and life support systems, including fans, pumps, and blowers. In addition, it offers heat transfer and vacuum systems comprising ejectors, process condensers, surface condensers, liquid ring pumps, heat exchangers, and nozzles, as well as turbomachinery products; and power generation systems, including turbines, generators, compressors, and pumps. The company also services and sells spare parts for its equipment. It sells its products directly in the United States, the Middle East, Canada, Asia, South America, and internationally.

GHM (Graham Corporation) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $1.13B, a trailing P/E of 75.12, a beta of 1.05 versus the broader market, a 52-week range of 35.85-103.24, average daily share volume of 137K, a public-listing history dating back to 1980, approximately 595 full-time employees. These structural characteristics shape how GHM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.05 places GHM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 75.12 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.

What is a butterfly on GHM?

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 GHM snapshot

As of May 15, 2026, spot at $98.59, ATM IV 64.10%, IV rank 31.72%, expected move 18.38%. The butterfly on GHM 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 GHM specifically: GHM IV at 64.10% 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 18.38% (roughly $18.12 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 GHM expiries trade a higher absolute premium for lower per-day decay. Position sizing on GHM should anchor to the underlying notional of $98.59 per share and to the trader's directional view on GHM stock.

GHM butterfly setup

The GHM 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 GHM near $98.59, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GHM 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 GHM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$95.00	$9.40
Sell 2	Call	$100.00	$6.85
Buy 1	Call	$105.00	$5.50

GHM butterfly risk and reward

Net Premium / Debit: -$120.00
Max Profit (per contract): $371.88
Max Loss (per contract): -$120.00
Breakeven(s): $96.20, $103.80
Risk / Reward Ratio: 3.099

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.

GHM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on GHM. 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%	-$120.00
$21.81	-77.9%	-$120.00
$43.61	-55.8%	-$120.00
$65.40	-33.7%	-$120.00
$87.20	-11.6%	-$120.00
$109.00	+10.6%	-$120.00
$130.80	+32.7%	-$120.00
$152.59	+54.8%	-$120.00
$174.39	+76.9%	-$120.00
$196.19	+99.0%	-$120.00

When traders use butterfly on GHM

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

GHM thesis for this butterfly

The market-implied 1-standard-deviation range for GHM extends from approximately $80.47 on the downside to $116.71 on the upside. A GHM long call butterfly is a pinning play: it pays maximum at the middle strike if GHM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GHM IV rank near 31.72% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on GHM should anchor more to the directional view and the expected-move geometry. As a Industrials name, GHM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GHM-specific events.

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

Frequently asked questions

What is a butterfly on GHM?: A butterfly on GHM is the butterfly strategy applied to GHM (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 GHM stock trading near $98.59, the strikes shown on this page are snapped to the nearest listed GHM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are GHM 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 GHM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 64.10%), the computed maximum profit is $371.88 per contract and the computed maximum loss is -$120.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a GHM butterfly?: The breakeven for the GHM butterfly priced on this page is roughly $96.20 and $103.80 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 GHM market-implied 1-standard-deviation expected move is approximately 18.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on GHM?: Butterflies on GHM are pinning bets - traders use them when they expect GHM 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 GHM implied volatility affect this butterfly?: GHM ATM IV is at 64.10% with IV rank near 31.72%, 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.