How are HPQ 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 HPQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 58.71%), the computed maximum profit is $84.97 per contract and the computed maximum loss is -$8.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HPQ butterfly?

The breakeven for the HPQ butterfly priced on this page is roughly $20.08 and $21.93 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 HPQ market-implied 1-standard-deviation expected move is approximately 16.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HPQ implied volatility affect this butterfly?

HPQ ATM IV is at 58.71% with IV rank near 88.75%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

HPQ Butterfly Strategy

HPQ (HP Inc.), in the Technology sector, (Computer Hardware industry), listed on NYSE.

HP Inc. provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktop and notebook personal computers, workstations, thin clients, commercial mobility devices, retail point-of-sale systems, displays and peripherals, software, support, and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions, and services. The Corporate Investments segment is involved in the HP Labs and business incubation, and investment projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors.

HPQ (HP Inc.) trades in the Technology sector, specifically Computer Hardware, with a market capitalization of approximately $19.52B, a trailing P/E of 7.85, a beta of 1.11 versus the broader market, a 52-week range of 17.56-29.55, average daily share volume of 18.8M, a public-listing history dating back to 1957, approximately 58K full-time employees. These structural characteristics shape how HPQ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.11 places HPQ roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 7.85 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. HPQ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on HPQ?

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 HPQ snapshot

As of May 15, 2026, spot at $20.96, ATM IV 58.71%, IV rank 88.75%, expected move 16.83%. The butterfly on HPQ 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 HPQ specifically: HPQ IV at 58.71% is rich versus its 1-year range, which makes a premium-buying HPQ butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 16.83% (roughly $3.53 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 HPQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on HPQ should anchor to the underlying notional of $20.96 per share and to the trader's directional view on HPQ stock.

HPQ butterfly setup

The HPQ 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 HPQ near $20.96, the first option leg uses a $20.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HPQ 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 HPQ shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$20.00	$1.77
Sell 2	Call	$21.00	$1.28
Buy 1	Call	$22.00	$0.88

HPQ butterfly risk and reward

Net Premium / Debit: -$8.00
Max Profit (per contract): $84.97
Max Loss (per contract): -$8.00
Breakeven(s): $20.08, $21.93
Risk / Reward Ratio: 10.621

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.

HPQ butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on HPQ. 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%	-$8.00
$4.64	-77.8%	-$8.00
$9.28	-55.7%	-$8.00
$13.91	-33.6%	-$8.00
$18.54	-11.5%	-$8.00
$23.18	+10.6%	-$8.00
$27.81	+32.7%	-$8.00
$32.44	+54.8%	-$8.00
$37.08	+76.9%	-$8.00
$41.71	+99.0%	-$8.00

When traders use butterfly on HPQ

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

HPQ thesis for this butterfly

The market-implied 1-standard-deviation range for HPQ extends from approximately $17.43 on the downside to $24.49 on the upside. A HPQ long call butterfly is a pinning play: it pays maximum at the middle strike if HPQ settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current HPQ IV rank near 88.75% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on HPQ at 58.71%. As a Technology name, HPQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HPQ-specific events.

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

Frequently asked questions

What is a butterfly on HPQ?: A butterfly on HPQ is the butterfly strategy applied to HPQ (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 HPQ stock trading near $20.96, the strikes shown on this page are snapped to the nearest listed HPQ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are HPQ 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 HPQ butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 58.71%), the computed maximum profit is $84.97 per contract and the computed maximum loss is -$8.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a HPQ butterfly?: The breakeven for the HPQ butterfly priced on this page is roughly $20.08 and $21.93 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 HPQ market-implied 1-standard-deviation expected move is approximately 16.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on HPQ?: Butterflies on HPQ are pinning bets - traders use them when they expect HPQ 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 HPQ implied volatility affect this butterfly?: HPQ ATM IV is at 58.71% with IV rank near 88.75%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.