How are HOOD 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 HOOD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 60.46%), the computed maximum profit is $288.93 per contract and the computed maximum loss is -$102.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HOOD butterfly?

The breakeven for the HOOD butterfly priced on this page is roughly $74.00 and $79.98 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 HOOD market-implied 1-standard-deviation expected move is approximately 17.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HOOD implied volatility affect this butterfly?

HOOD ATM IV is at 60.46% with IV rank near 26.40%, 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.

HOOD Butterfly Strategy

HOOD (Robinhood Markets, Inc.), in the Financial Services sector, (Financial - Capital Markets industry), listed on NASDAQ.

Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), options, gold, and cryptocurrencies. The company also offers various learning and education solutions comprise Snacks, a digest of business news stories; Learn, which is a collection of approximately articles, including guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free premium news from various sites, such as Barron's, Reuters, and The Wall Street Journal; lists and alerts, which allow users to create custom watchlists and alerts to monitor securities, ETFs, and cryptocurrencies, as well as cash management services; and offers First trade recommendations to all new customers who have yet to place a trade. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.

HOOD (Robinhood Markets, Inc.) trades in the Financial Services sector, specifically Financial - Capital Markets, with a market capitalization of approximately $69.11B, a trailing P/E of 36.38, a beta of 2.29 versus the broader market, a 52-week range of 57.68-153.86, average daily share volume of 29.5M, a public-listing history dating back to 2021, approximately 3K full-time employees. These structural characteristics shape how HOOD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.29 indicates HOOD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 36.38 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 HOOD?

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 HOOD snapshot

As of May 15, 2026, spot at $77.47, ATM IV 60.46%, IV rank 26.40%, expected move 17.33%. The butterfly on HOOD 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 HOOD specifically: HOOD IV at 60.46% is on the cheap side of its 1-year range, which favors premium-buying structures like a HOOD butterfly, with a market-implied 1-standard-deviation move of approximately 17.33% (roughly $13.43 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 HOOD expiries trade a higher absolute premium for lower per-day decay. Position sizing on HOOD should anchor to the underlying notional of $77.47 per share and to the trader's directional view on HOOD stock.

HOOD butterfly setup

The HOOD 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 HOOD near $77.47, the first option leg uses a $74.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HOOD 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 HOOD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$74.00	$7.25
Sell 2	Call	$77.00	$5.53
Buy 1	Call	$81.00	$3.83

HOOD butterfly risk and reward

Net Premium / Debit: -$2.50
Max Profit (per contract): $288.93
Max Loss (per contract): -$102.50
Breakeven(s): $74.00, $79.98
Risk / Reward Ratio: 2.819

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.

HOOD butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on HOOD. 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%	-$2.50
$17.14	-77.9%	-$2.50
$34.27	-55.8%	-$2.50
$51.39	-33.7%	-$2.50
$68.52	-11.6%	-$2.50
$85.65	+10.6%	-$102.50
$102.78	+32.7%	-$102.50
$119.91	+54.8%	-$102.50
$137.03	+76.9%	-$102.50
$154.16	+99.0%	-$102.50

When traders use butterfly on HOOD

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

HOOD thesis for this butterfly

The market-implied 1-standard-deviation range for HOOD extends from approximately $64.04 on the downside to $90.90 on the upside. A HOOD long call butterfly is a pinning play: it pays maximum at the middle strike if HOOD settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HOOD IV rank near 26.40% 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 HOOD at 60.46%. As a Financial Services name, HOOD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HOOD-specific events.

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

Frequently asked questions

What is a butterfly on HOOD?: A butterfly on HOOD is the butterfly strategy applied to HOOD (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 HOOD stock trading near $77.47, the strikes shown on this page are snapped to the nearest listed HOOD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are HOOD 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 HOOD butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 60.46%), the computed maximum profit is $288.93 per contract and the computed maximum loss is -$102.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a HOOD butterfly?: The breakeven for the HOOD butterfly priced on this page is roughly $74.00 and $79.98 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 HOOD market-implied 1-standard-deviation expected move is approximately 17.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on HOOD?: Butterflies on HOOD are pinning bets - traders use them when they expect HOOD 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 HOOD implied volatility affect this butterfly?: HOOD ATM IV is at 60.46% with IV rank near 26.40%, 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.