How are GM 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 GM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 35.10%), the computed maximum profit is $221.85 per contract and the computed maximum loss is -$148.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a GM butterfly?

The breakeven for the GM butterfly priced on this page is roughly $72.48 and $77.52 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 GM market-implied 1-standard-deviation expected move is approximately 10.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current GM implied volatility affect this butterfly?

GM ATM IV is at 35.10% with IV rank near 45.89%, 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.

GM Butterfly Strategy

GM (General Motors Company), in the Consumer Cyclical sector, (Auto - Manufacturers industry), listed on NYSE.

General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts and accessories in North America, the Asia Pacific, the Middle East, Africa, South America, the United States, and China. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, and Wuling brand names. The company also sells trucks, crossovers, cars, and purpose-built vehicles to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, it offers safety and security services for retail and fleet customers, including automatic crash response, emergency services, roadside assistance, crisis assist, stolen vehicle assistance, and turn-by-turn navigation; and connected services comprising mobile applications for owners to remotely control their vehicles and electric vehicle owners to locate charging stations, on-demand vehicle diagnostics, smart driver, marketplace in-vehicle commerce, in-vehicle voice, voice assistant, navigation and app ecosystem, connected navigation, SiriusXM with 360L, and 4G LTE wireless connectivity, as well as develops and commercializes autonomous vehicle technology. Further, the company provides automotive financing and insurance services; and software-enabled services and subscriptions.

GM (General Motors Company) trades in the Consumer Cyclical sector, specifically Auto - Manufacturers, with a market capitalization of approximately $68.36B, a trailing P/E of 27.44, a beta of 1.29 versus the broader market, a 52-week range of 46.82-87.62, average daily share volume of 7.3M, a public-listing history dating back to 2010, approximately 162K full-time employees. These structural characteristics shape how GM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.29 places GM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on GM?

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 GM snapshot

As of May 15, 2026, spot at $74.92, ATM IV 35.10%, IV rank 45.89%, expected move 10.06%. The butterfly on GM 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 28-day expiry.

Why this butterfly structure on GM specifically: GM IV at 35.10% 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 10.06% (roughly $7.54 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated GM expiries trade a higher absolute premium for lower per-day decay. Position sizing on GM should anchor to the underlying notional of $74.92 per share and to the trader's directional view on GM stock.

GM butterfly setup

The GM 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 GM near $74.92, the first option leg uses a $71.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GM chain at a 28-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 GM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$71.00	$5.68
Sell 2	Call	$75.00	$2.83
Buy 1	Call	$79.00	$1.47

GM butterfly risk and reward

Net Premium / Debit: -$148.00
Max Profit (per contract): $221.85
Max Loss (per contract): -$148.00
Breakeven(s): $72.48, $77.52
Risk / Reward Ratio: 1.499

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.

GM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on GM. 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%	-$148.00
$16.57	-77.9%	-$148.00
$33.14	-55.8%	-$148.00
$49.70	-33.7%	-$148.00
$66.27	-11.6%	-$148.00
$82.83	+10.6%	-$148.00
$99.39	+32.7%	-$148.00
$115.96	+54.8%	-$148.00
$132.52	+76.9%	-$148.00
$149.09	+99.0%	-$148.00

When traders use butterfly on GM

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

GM thesis for this butterfly

The market-implied 1-standard-deviation range for GM extends from approximately $67.38 on the downside to $82.46 on the upside. A GM long call butterfly is a pinning play: it pays maximum at the middle strike if GM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current GM IV rank near 45.89% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on GM should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, GM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GM-specific events.

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

Frequently asked questions

What is a butterfly on GM?: A butterfly on GM is the butterfly strategy applied to GM (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 GM stock trading near $74.92, the strikes shown on this page are snapped to the nearest listed GM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are GM 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 GM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 35.10%), the computed maximum profit is $221.85 per contract and the computed maximum loss is -$148.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a GM butterfly?: The breakeven for the GM butterfly priced on this page is roughly $72.48 and $77.52 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 GM market-implied 1-standard-deviation expected move is approximately 10.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on GM?: Butterflies on GM are pinning bets - traders use them when they expect GM 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 GM implied volatility affect this butterfly?: GM ATM IV is at 35.10% with IV rank near 45.89%, 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.