How are HLI 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 HLI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $595.43 per contract and the computed maximum loss is -$367.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HLI butterfly?

The breakeven for the HLI butterfly priced on this page is roughly $156.33 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 HLI market-implied 1-standard-deviation expected move is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HLI implied volatility affect this butterfly?

HLI ATM IV is at 32.50% with IV rank near 5.17%, 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.

HLI Butterfly Strategy

HLI (Houlihan Lokey, Inc.), in the Financial Services sector, (Financial - Capital Markets industry), listed on NYSE.

Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructuring, and financial and valuation advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advise financial sponsors on various transactions. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The Financial and Valuation Advisory segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property.

HLI (Houlihan Lokey, Inc.) trades in the Financial Services sector, specifically Financial - Capital Markets, with a market capitalization of approximately $10.46B, a trailing P/E of 23.46, a beta of 1.00 versus the broader market, a 52-week range of 134.41-211.777, average daily share volume of 653K, a public-listing history dating back to 2015, approximately 3K full-time employees. These structural characteristics shape how HLI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.00 places HLI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. HLI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on HLI?

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 HLI snapshot

As of May 15, 2026, spot at $150.38, ATM IV 32.50%, IV rank 5.17%, expected move 9.32%. The butterfly on HLI 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 HLI specifically: HLI IV at 32.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a HLI butterfly, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $14.01 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 HLI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HLI should anchor to the underlying notional of $150.38 per share and to the trader's directional view on HLI stock.

HLI butterfly setup

The HLI 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 HLI near $150.38, the first option leg uses a $145.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HLI 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 HLI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$145.00	$8.95
Sell 2	Call	$150.00	$6.10
Buy 1	Call	$160.00	$1.93

HLI butterfly risk and reward

Net Premium / Debit: +$132.50
Max Profit (per contract): $595.43
Max Loss (per contract): -$367.50
Breakeven(s): $156.33
Risk / Reward Ratio: 1.620

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.

HLI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on HLI. 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%	+$132.50
$33.26	-77.9%	+$132.50
$66.51	-55.8%	+$132.50
$99.76	-33.7%	+$132.50
$133.00	-11.6%	+$132.50
$166.25	+10.6%	-$367.50
$199.50	+32.7%	-$367.50
$232.75	+54.8%	-$367.50
$266.00	+76.9%	-$367.50
$299.25	+99.0%	-$367.50

When traders use butterfly on HLI

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

HLI thesis for this butterfly

The market-implied 1-standard-deviation range for HLI extends from approximately $136.37 on the downside to $164.39 on the upside. A HLI long call butterfly is a pinning play: it pays maximum at the middle strike if HLI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HLI IV rank near 5.17% 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 HLI at 32.50%. As a Financial Services name, HLI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HLI-specific events.

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

Frequently asked questions

What is a butterfly on HLI?: A butterfly on HLI is the butterfly strategy applied to HLI (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 HLI stock trading near $150.38, the strikes shown on this page are snapped to the nearest listed HLI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are HLI 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 HLI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $595.43 per contract and the computed maximum loss is -$367.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a HLI butterfly?: The breakeven for the HLI butterfly priced on this page is roughly $156.33 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 HLI market-implied 1-standard-deviation expected move is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on HLI?: Butterflies on HLI are pinning bets - traders use them when they expect HLI 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 HLI implied volatility affect this butterfly?: HLI ATM IV is at 32.50% with IV rank near 5.17%, 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.