How are INSM 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 INSM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 57.80%), the computed maximum profit is $419.95 per contract and the computed maximum loss is -$70.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a INSM butterfly?

The breakeven for the INSM butterfly priced on this page is roughly $100.67 and $109.30 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 INSM market-implied 1-standard-deviation expected move is approximately 16.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current INSM implied volatility affect this butterfly?

INSM ATM IV is at 57.80% with IV rank near 38.78%, 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.

INSM Butterfly Strategy

INSM (Insmed Incorporated), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Insmed Incorporated operates as a biopharmaceutical enterprise focused on creating and introducing medical solutions for individuals facing severe and uncommon health conditions. The company's marketed treatment, ARIKAYCE, is administered to adult patients suffering from Mycobacterium avium complex (MAC) lung disease, serving as a component of a broader antibacterial drug regimen. In its development pipeline, Insmed is advancing Brensocatib, an oral and reversible inhibitor targeting dipeptidyl peptidase 1, which is being investigated for its potential in treating bronchiectasis and other disorders mediated by neutrophils. Additionally, the firm is developing Treprostinil Palmitil Inhalation Powder, an inhaled version of the treprostinil palmitil prodrug, designed to address pulmonary arterial hypertension and various other rare lung ailments. Founded in 1988, Insmed Incorporated maintains its primary corporate offices in Bridgewater, New Jersey.

INSM (Insmed Incorporated) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $22.41B, a beta of 0.77 versus the broader market, a 52-week range of 90.39-212.75, average daily share volume of 3.7M, a public-listing history dating back to 2000, approximately 1K full-time employees. These structural characteristics shape how INSM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.77 places INSM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a butterfly on INSM?

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 INSM snapshot

As of June 29, 2026, spot at $104.57, ATM IV 57.80%, IV rank 38.78%, expected move 16.57%. The butterfly on INSM 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 18-day expiry.

Why this butterfly structure on INSM specifically: INSM IV at 57.80% 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 16.57% (roughly $17.33 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated INSM expiries trade a higher absolute premium for lower per-day decay. Position sizing on INSM should anchor to the underlying notional of $104.57 per share and to the trader's directional view on INSM stock.

INSM butterfly setup

The INSM 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 INSM near $104.57, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed INSM chain at a 18-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 INSM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$100.00	$7.65
Sell 2	Call	$105.00	$5.10
Buy 1	Call	$110.00	$3.25

INSM butterfly risk and reward

Net Premium / Debit: -$70.00
Max Profit (per contract): $419.95
Max Loss (per contract): -$70.00
Breakeven(s): $100.67, $109.30
Risk / Reward Ratio: 5.999

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.

INSM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on INSM. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$70.00
$23.13	-77.9%	-$70.00
$46.25	-55.8%	-$70.00
$69.37	-33.7%	-$70.00
$92.49	-11.6%	-$70.00
$115.61	+10.6%	-$70.00
$138.73	+32.7%	-$70.00
$161.85	+54.8%	-$70.00
$184.97	+76.9%	-$70.00
$208.09	+99.0%	-$70.00

When traders use butterfly on INSM

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

INSM thesis for this butterfly

The market-implied 1-standard-deviation range for INSM extends from approximately $87.24 on the downside to $121.90 on the upside. A INSM long call butterfly is a pinning play: it pays maximum at the middle strike if INSM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current INSM IV rank near 38.78% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on INSM should anchor more to the directional view and the expected-move geometry. As a Healthcare name, INSM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to INSM-specific events.

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

Frequently asked questions

What is a butterfly on INSM?: A butterfly on INSM is the butterfly strategy applied to INSM (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 INSM stock trading near $104.57, the strikes shown on this page are snapped to the nearest listed INSM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are INSM 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 INSM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 57.80%), the computed maximum profit is $419.95 per contract and the computed maximum loss is -$70.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a INSM butterfly?: The breakeven for the INSM butterfly priced on this page is roughly $100.67 and $109.30 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 INSM market-implied 1-standard-deviation expected move is approximately 16.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on INSM?: Butterflies on INSM are pinning bets - traders use them when they expect INSM 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 INSM implied volatility affect this butterfly?: INSM ATM IV is at 57.80% with IV rank near 38.78%, 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.