How are HP 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 HP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 47.20%), the computed maximum profit is $200.83 per contract and the computed maximum loss is -$45.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HP butterfly?

The breakeven for the HP butterfly priced on this page is roughly $37.95 and $42.05 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 HP market-implied 1-standard-deviation expected move is approximately 13.53%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HP implied volatility affect this butterfly?

HP ATM IV is at 47.20% with IV rank near 14.77%, 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.

HP Butterfly Strategy

HP (Helmerich & Payne, Inc.), in the Energy sector, (Oil & Gas Drilling industry), listed on NYSE.

Helmerich & Payne, Inc., together with its subsidiaries, provides drilling services and solutions for exploration and production companies. The company operates through three segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. The North America Solutions segment drills primarily in Colorado, Louisiana, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, and Wyoming. It also focuses on developing, promoting, and commercializing technologies designed to enhance the drilling operations, as well as wellbore quality and placement. The Offshore Gulf of Mexico segment has drilling operations in Louisiana and in U.S. federal waters in the Gulf of Mexico. The International Solutions segment conducts drilling operations in Argentina, Bahrain, Colombia, and the United Arab Emirates.

HP (Helmerich & Payne, Inc.) trades in the Energy sector, specifically Oil & Gas Drilling, with a market capitalization of approximately $3.82B, a beta of 0.61 versus the broader market, a 52-week range of 14.65-41.68, average daily share volume of 1.3M, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how HP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.61 indicates HP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. HP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on HP?

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 HP snapshot

As of May 15, 2026, spot at $39.36, ATM IV 47.20%, IV rank 14.77%, expected move 13.53%. The butterfly on HP 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 217-day expiry.

Why this butterfly structure on HP specifically: HP IV at 47.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a HP butterfly, with a market-implied 1-standard-deviation move of approximately 13.53% (roughly $5.33 on the underlying). The 217-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated HP expiries trade a higher absolute premium for lower per-day decay. Position sizing on HP should anchor to the underlying notional of $39.36 per share and to the trader's directional view on HP stock.

HP butterfly setup

The HP 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 HP near $39.36, the first option leg uses a $37.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HP chain at a 217-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 HP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$37.50	$6.30
Sell 2	Call	$40.00	$4.95
Buy 1	Call	$42.50	$4.05

HP butterfly risk and reward

Net Premium / Debit: -$45.00
Max Profit (per contract): $200.83
Max Loss (per contract): -$45.00
Breakeven(s): $37.95, $42.05
Risk / Reward Ratio: 4.463

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.

HP butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on HP. 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%	-$45.00
$8.71	-77.9%	-$45.00
$17.41	-55.8%	-$45.00
$26.11	-33.7%	-$45.00
$34.82	-11.5%	-$45.00
$43.52	+10.6%	-$45.00
$52.22	+32.7%	-$45.00
$60.92	+54.8%	-$45.00
$69.62	+76.9%	-$45.00
$78.32	+99.0%	-$45.00

When traders use butterfly on HP

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

HP thesis for this butterfly

The market-implied 1-standard-deviation range for HP extends from approximately $34.03 on the downside to $44.69 on the upside. A HP long call butterfly is a pinning play: it pays maximum at the middle strike if HP settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HP IV rank near 14.77% 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 HP at 47.20%. As a Energy name, HP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HP-specific events.

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

Frequently asked questions

What is a butterfly on HP?: A butterfly on HP is the butterfly strategy applied to HP (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 HP stock trading near $39.36, the strikes shown on this page are snapped to the nearest listed HP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are HP 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 HP butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 47.20%), the computed maximum profit is $200.83 per contract and the computed maximum loss is -$45.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a HP butterfly?: The breakeven for the HP butterfly priced on this page is roughly $37.95 and $42.05 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 HP market-implied 1-standard-deviation expected move is approximately 13.53%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on HP?: Butterflies on HP are pinning bets - traders use them when they expect HP 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 HP implied volatility affect this butterfly?: HP ATM IV is at 47.20% with IV rank near 14.77%, 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.