How are HCI 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 HCI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.30%), the computed maximum profit is $565.30 per contract and the computed maximum loss is -$420.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HCI butterfly?

The breakeven for the HCI butterfly priced on this page is roughly $160.80 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 HCI market-implied 1-standard-deviation expected move is approximately 9.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HCI implied volatility affect this butterfly?

HCI ATM IV is at 33.30% with IV rank near 2.95%, 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.

HCI Butterfly Strategy

HCI (HCI Group, Inc.), in the Financial Services sector, (Insurance - Property & Casualty industry), listed on NYSE.

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

HCI (HCI Group, Inc.) trades in the Financial Services sector, specifically Insurance - Property & Casualty, with a market capitalization of approximately $1.96B, a trailing P/E of 5.79, a beta of 1.09 versus the broader market, a 52-week range of 136.37-210.5, average daily share volume of 174K, a public-listing history dating back to 2008, approximately 552 full-time employees. These structural characteristics shape how HCI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.09 places HCI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 5.79 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. HCI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on HCI?

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 HCI snapshot

As of May 15, 2026, spot at $155.63, ATM IV 33.30%, IV rank 2.95%, expected move 9.55%. The butterfly on HCI 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 HCI specifically: HCI IV at 33.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a HCI butterfly, with a market-implied 1-standard-deviation move of approximately 9.55% (roughly $14.86 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 HCI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HCI should anchor to the underlying notional of $155.63 per share and to the trader's directional view on HCI stock.

HCI butterfly setup

The HCI 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 HCI near $155.63, the first option leg uses a $150.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HCI 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 HCI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$150.00	$10.10
Sell 2	Call	$155.00	$7.00
Buy 1	Call	$165.00	$3.10

HCI butterfly risk and reward

Net Premium / Debit: +$80.00
Max Profit (per contract): $565.30
Max Loss (per contract): -$420.00
Breakeven(s): $160.80
Risk / Reward Ratio: 1.346

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.

HCI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on HCI. 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%	+$80.00
$34.42	-77.9%	+$80.00
$68.83	-55.8%	+$80.00
$103.24	-33.7%	+$80.00
$137.65	-11.6%	+$80.00
$172.06	+10.6%	-$420.00
$206.47	+32.7%	-$420.00
$240.88	+54.8%	-$420.00
$275.29	+76.9%	-$420.00
$309.70	+99.0%	-$420.00

When traders use butterfly on HCI

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

HCI thesis for this butterfly

The market-implied 1-standard-deviation range for HCI extends from approximately $140.77 on the downside to $170.49 on the upside. A HCI long call butterfly is a pinning play: it pays maximum at the middle strike if HCI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HCI IV rank near 2.95% 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 HCI at 33.30%. As a Financial Services name, HCI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HCI-specific events.

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

Frequently asked questions

What is a butterfly on HCI?: A butterfly on HCI is the butterfly strategy applied to HCI (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 HCI stock trading near $155.63, the strikes shown on this page are snapped to the nearest listed HCI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are HCI 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 HCI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 33.30%), the computed maximum profit is $565.30 per contract and the computed maximum loss is -$420.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a HCI butterfly?: The breakeven for the HCI butterfly priced on this page is roughly $160.80 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 HCI market-implied 1-standard-deviation expected move is approximately 9.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on HCI?: Butterflies on HCI are pinning bets - traders use them when they expect HCI 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 HCI implied volatility affect this butterfly?: HCI ATM IV is at 33.30% with IV rank near 2.95%, 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.