How are IPI 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 IPI butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 45.40%), the computed maximum profit is $125.10 per contract and the computed maximum loss is -$62.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a IPI butterfly?

The breakeven for the IPI butterfly priced on this page is roughly $37.38 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The IPI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current IPI implied volatility affect this butterfly?

IPI ATM IV is at 45.40% with IV rank near 23.40%, 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.

IPI Butterfly Strategy

IPI (Intrepid Potash, Inc.), in the Basic Materials sector, (Agricultural Inputs industry), listed on NYSE.

Intrepid Potash, Inc. (IPI), a company founded in 2000 and based in Denver, Colorado, specializes in the extraction and production of potash for markets within the United States and globally. The firm's operations are strategically divided into three principal segments: Potash, Trio, and Oilfield Solutions. Within the Potash segment, Intrepid supplies muriate of potash, also known as potassium chloride. This versatile compound serves multiple applications, including as a vital fertilizer component for agriculture, an essential ingredient in drilling and fracturing fluids for the oil and gas sector, an input for various industrial processes, and a nutritional supplement for animal feed. The Trio segment focuses on a specialized fertilizer product named Trio, which uniquely delivers potassium, sulfate, and magnesium in a single, convenient particle. Through its Oilfield Solutions segment, Intrepid provides critical support to the oil and gas services industry by supplying water, delivering on-site, real-time potassium chloride mixing for hydraulic fracturing operations, and offering comprehensive trucking services.

IPI (Intrepid Potash, Inc.) trades in the Basic Materials sector, specifically Agricultural Inputs, with a market capitalization of approximately $491.9M, a trailing P/E of 18.37, a beta of 1.25 versus the broader market, a 52-week range of 22.55-50.34, average daily share volume of 227K, a public-listing history dating back to 2008, approximately 478 full-time employees. These structural characteristics shape how IPI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.25 places IPI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. IPI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on IPI?

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.

IPI snapshot

As of August 14, 2026, spot at $36.42, ATM IV 45.40%, IV rank 23.40%, expected move 13.02%. The butterfly on IPI below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this butterfly structure on IPI specifically: IPI IV at 45.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a IPI butterfly, with a market-implied 1-standard-deviation move of approximately 13.02% (roughly $4.74 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated IPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on IPI should anchor to the underlying notional of $36.42 per share and to the trader's directional view on IPI stock.

IPI butterfly setup

The IPI butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With IPI at $36.42 on that close, the first option leg uses a $35.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IPI chain at a 35-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 IPI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$35.00	$3.18
Sell 2	Call	$36.00	$2.45
Buy 1	Call	$38.00	$1.35

IPI butterfly risk and reward

Net Premium / Debit: +$37.50
Max Profit (per contract): $125.10
Max Loss (per contract): -$62.50
Breakeven(s): $37.38
Risk / Reward Ratio: 2.002

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.

IPI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on IPI. 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%	+$37.50
$8.06	-77.9%	+$37.50
$16.11	-55.8%	+$37.50
$24.16	-33.6%	+$37.50
$32.22	-11.5%	+$37.50
$40.27	+10.6%	-$62.50
$48.32	+32.7%	-$62.50
$56.37	+54.8%	-$62.50
$64.42	+76.9%	-$62.50
$72.47	+99.0%	-$62.50

When traders use butterfly on IPI

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

IPI thesis for this butterfly

The market-implied 1-standard-deviation range for IPI extends from approximately $31.68 on the downside to $41.16 on the upside. A IPI long call butterfly is a pinning play: it pays maximum at the middle strike if IPI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current IPI IV rank near 23.40% 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 IPI at 45.40%. As a Basic Materials name, IPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IPI-specific events.

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

Frequently asked questions

What is a butterfly on IPI?: A butterfly on IPI is the butterfly strategy applied to IPI (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 IPI stock at $36.42 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed IPI chain strike and the premiums come straight from that session's bid/ask midpoint.
How are IPI 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 IPI butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 45.40%), the computed maximum profit is $125.10 per contract and the computed maximum loss is -$62.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a IPI butterfly?: The breakeven for the IPI butterfly priced on this page is roughly $37.38 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The IPI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on IPI?: Butterflies on IPI are pinning bets - traders use them when they expect IPI 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 IPI implied volatility affect this butterfly?: IPI ATM IV is at 45.40% with IV rank near 23.40%, 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.