How are KMI 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 KMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.04%), the computed maximum profit is $108.90 per contract and the computed maximum loss is -$78.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KMI butterfly?

The breakeven for the KMI butterfly priced on this page is roughly $31.78 and $34.22 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 KMI market-implied 1-standard-deviation expected move is approximately 6.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KMI implied volatility affect this butterfly?

KMI ATM IV is at 23.04% with IV rank near 31.79%, 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.

KMI Butterfly Strategy

KMI (Kinder Morgan, Inc.), in the Energy sector, (Oil & Gas Midstream industry), listed on NYSE.

Kinder Morgan, Inc. operates as a leading energy infrastructure company across North America. Its extensive operations are categorized into four primary business segments: Natural Gas Pipelines, Products Pipelines, Terminals, and CO2. The Natural Gas Pipelines segment manages a vast network of interstate and intrastate natural gas pipelines, along with underground storage systems. This includes natural gas gathering systems, processing and treatment facilities, natural gas liquids fractionation plants, transportation systems, and infrastructure for liquefied natural gas liquefaction and storage. Within its Products Pipelines segment, the company owns and operates pipelines designed for refined petroleum products, crude oil, and condensate, supported by associated product terminals and facilities for petroleum pipeline transmix. The Terminals segment involves the ownership and operation of both liquid and bulk terminals that are utilized for storing and handling a wide array of commodities, such as gasoline, diesel fuel, various chemicals, ethanol, metals, and petroleum coke.

KMI (Kinder Morgan, Inc.) trades in the Energy sector, specifically Oil & Gas Midstream, with a market capitalization of approximately $73.84B, a trailing P/E of 22.28, a beta of 0.54 versus the broader market, a 52-week range of 25.6-34.81, average daily share volume of 11.2M, a public-listing history dating back to 2011, approximately 11K full-time employees. These structural characteristics shape how KMI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.54 indicates KMI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. KMI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on KMI?

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 KMI snapshot

As of June 26, 2026, spot at $33.03, ATM IV 23.04%, IV rank 31.79%, expected move 6.61%. The butterfly on KMI 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 32-day expiry.

Why this butterfly structure on KMI specifically: KMI IV at 23.04% 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 6.61% (roughly $2.18 on the underlying). The 32-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KMI expiries trade a higher absolute premium for lower per-day decay. Position sizing on KMI should anchor to the underlying notional of $33.03 per share and to the trader's directional view on KMI stock.

KMI butterfly setup

The KMI 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 KMI near $33.03, the first option leg uses a $31.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KMI chain at a 32-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 KMI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$31.00	$1.84
Sell 2	Call	$33.00	$0.63
Buy 1	Call	$35.00	$0.19

KMI butterfly risk and reward

Net Premium / Debit: -$78.00
Max Profit (per contract): $108.90
Max Loss (per contract): -$78.00
Breakeven(s): $31.78, $34.22
Risk / Reward Ratio: 1.396

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.

KMI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on KMI. 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%	-$78.00
$7.31	-77.9%	-$78.00
$14.61	-55.8%	-$78.00
$21.92	-33.6%	-$78.00
$29.22	-11.5%	-$78.00
$36.52	+10.6%	-$78.00
$43.82	+32.7%	-$78.00
$51.12	+54.8%	-$78.00
$58.43	+76.9%	-$78.00
$65.73	+99.0%	-$78.00

When traders use butterfly on KMI

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

KMI thesis for this butterfly

The market-implied 1-standard-deviation range for KMI extends from approximately $30.85 on the downside to $35.21 on the upside. A KMI long call butterfly is a pinning play: it pays maximum at the middle strike if KMI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KMI IV rank near 31.79% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on KMI should anchor more to the directional view and the expected-move geometry. As a Energy name, KMI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KMI-specific events.

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

Frequently asked questions

What is a butterfly on KMI?: A butterfly on KMI is the butterfly strategy applied to KMI (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 KMI stock trading near $33.03, the strikes shown on this page are snapped to the nearest listed KMI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KMI 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 KMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.04%), the computed maximum profit is $108.90 per contract and the computed maximum loss is -$78.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KMI butterfly?: The breakeven for the KMI butterfly priced on this page is roughly $31.78 and $34.22 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 KMI market-implied 1-standard-deviation expected move is approximately 6.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on KMI?: Butterflies on KMI are pinning bets - traders use them when they expect KMI 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 KMI implied volatility affect this butterfly?: KMI ATM IV is at 23.04% with IV rank near 31.79%, 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.