How are IDCC 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 IDCC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 45.20%), the computed maximum profit is $1,124.03 per contract and the computed maximum loss is -$780.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a IDCC butterfly?

The breakeven for the IDCC butterfly priced on this page is roughly $272.20 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 IDCC market-implied 1-standard-deviation expected move is approximately 12.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current IDCC implied volatility affect this butterfly?

IDCC ATM IV is at 45.20% with IV rank near 53.46%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

IDCC Butterfly Strategy

IDCC (InterDigital, Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.

InterDigital, Inc., together with its subsidiaries, designs and develops technologies that enable and enhance wireless communications in the United States, China, South Korea, Japan, Taiwan, and Europe. It provides technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G NR, beyond 5G (B5G), extended reality over wireless, and cellular Internet of Things (IoT) areas, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. It also provides video coding and transmission technologies; and engages in the research and development of artificial intelligence. The company's patented technologies are used in various products that include cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, which comprise base stations; components, dongles, and modules for wireless devices; and IoT devices and software platforms. As of December 31, 2021, it had a portfolio of approximately 27,500 patents and patent applications related to wireless communications, video coding, display technology, and other areas.

IDCC (InterDigital, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $6.98B, a trailing P/E of 18.97, a beta of 1.49 versus the broader market, a 52-week range of 205.78-412.6, average daily share volume of 414K, a public-listing history dating back to 1981, approximately 430 full-time employees. These structural characteristics shape how IDCC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.49 indicates IDCC has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. IDCC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on IDCC?

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 IDCC snapshot

As of May 15, 2026, spot at $263.00, ATM IV 45.20%, IV rank 53.46%, expected move 12.96%. The butterfly on IDCC 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 IDCC specifically: IDCC IV at 45.20% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 12.96% (roughly $34.08 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 IDCC expiries trade a higher absolute premium for lower per-day decay. Position sizing on IDCC should anchor to the underlying notional of $263.00 per share and to the trader's directional view on IDCC stock.

IDCC butterfly setup

The IDCC 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 IDCC near $263.00, the first option leg uses a $250.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IDCC 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 IDCC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$250.00	$21.55
Sell 2	Call	$260.00	$15.80
Buy 1	Call	$280.00	$7.85

IDCC butterfly risk and reward

Net Premium / Debit: +$220.00
Max Profit (per contract): $1,124.03
Max Loss (per contract): -$780.00
Breakeven(s): $272.20
Risk / Reward Ratio: 1.441

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.

IDCC butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on IDCC. 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%	+$220.00
$58.16	-77.9%	+$220.00
$116.31	-55.8%	+$220.00
$174.46	-33.7%	+$220.00
$232.61	-11.6%	+$220.00
$290.76	+10.6%	-$780.00
$348.91	+32.7%	-$780.00
$407.06	+54.8%	-$780.00
$465.21	+76.9%	-$780.00
$523.36	+99.0%	-$780.00

When traders use butterfly on IDCC

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

IDCC thesis for this butterfly

The market-implied 1-standard-deviation range for IDCC extends from approximately $228.92 on the downside to $297.08 on the upside. A IDCC long call butterfly is a pinning play: it pays maximum at the middle strike if IDCC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current IDCC IV rank near 53.46% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on IDCC should anchor more to the directional view and the expected-move geometry. As a Technology name, IDCC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IDCC-specific events.

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

Frequently asked questions

What is a butterfly on IDCC?: A butterfly on IDCC is the butterfly strategy applied to IDCC (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 IDCC stock trading near $263.00, the strikes shown on this page are snapped to the nearest listed IDCC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are IDCC 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 IDCC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 45.20%), the computed maximum profit is $1,124.03 per contract and the computed maximum loss is -$780.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a IDCC butterfly?: The breakeven for the IDCC butterfly priced on this page is roughly $272.20 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 IDCC market-implied 1-standard-deviation expected move is approximately 12.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on IDCC?: Butterflies on IDCC are pinning bets - traders use them when they expect IDCC 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 IDCC implied volatility affect this butterfly?: IDCC ATM IV is at 45.20% with IV rank near 53.46%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.