How are KR 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 KR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.31%), the computed maximum profit is $106.39 per contract and the computed maximum loss is -$171.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KR butterfly?

The breakeven for the KR butterfly priced on this page is roughly $53.71 and $56.29 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 KR market-implied 1-standard-deviation expected move is approximately 8.40%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KR implied volatility affect this butterfly?

KR ATM IV is at 29.31% with IV rank near 59.49%, 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.

KR Butterfly Strategy

KR (The Kroger Co.), in the Consumer Defensive sector, (Grocery Stores industry), listed on NYSE.

The Kroger Co. functions as a significant retail entity throughout the United States, encompassing a varied collection of store formats. Its operations include integrated food and drug stores, which stock a broad range of products from natural and organic sections to pharmacies, general merchandise, pet centers, fresh seafood, and organic produce. The company also runs multi-department stores that broaden their offerings to include apparel, home fashion and furnishings, outdoor living goods, electronics, automotive products, and toys. Furthermore, Kroger's marketplace stores blend comprehensive grocery services, pharmacies, health and beauty care, and perishable items with general merchandise such as clothing and household goods. Its price impact warehouse stores, on the other hand, concentrate on providing groceries, health and beauty essentials, meat, dairy, baked goods, and fresh produce at competitive prices. Beyond its retail presence, Kroger is involved in manufacturing and processing food products, which it then sells through its own supermarkets and online platforms.

KR (The Kroger Co.) trades in the Consumer Defensive sector, specifically Grocery Stores, with a market capitalization of approximately $35.59B, a trailing P/E of 33.61, a beta of 0.42 versus the broader market, a 52-week range of 55.6-76.58, average daily share volume of 6.6M, a public-listing history dating back to 1977, approximately 409K full-time employees. These structural characteristics shape how KR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.42 indicates KR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. KR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on KR?

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 KR snapshot

As of June 30, 2026, spot at $55.50, ATM IV 29.31%, IV rank 59.49%, expected move 8.40%. The butterfly on KR 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 31-day expiry.

Why this butterfly structure on KR specifically: KR IV at 29.31% 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 8.40% (roughly $4.66 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KR expiries trade a higher absolute premium for lower per-day decay. Position sizing on KR should anchor to the underlying notional of $55.50 per share and to the trader's directional view on KR stock.

KR butterfly setup

The KR 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 KR near $55.50, the first option leg uses a $53.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KR chain at a 31-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 KR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$53.00	$4.28
Sell 2	Call	$55.00	$2.27
Buy 1	Call	$58.00	$0.98

KR butterfly risk and reward

Net Premium / Debit: -$71.00
Max Profit (per contract): $106.39
Max Loss (per contract): -$171.00
Breakeven(s): $53.71, $56.29
Risk / Reward Ratio: 0.622

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.

KR butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on KR. 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%	-$71.00
$12.28	-77.9%	-$71.00
$24.55	-55.8%	-$71.00
$36.82	-33.7%	-$71.00
$49.09	-11.5%	-$71.00
$61.36	+10.6%	-$171.00
$73.63	+32.7%	-$171.00
$85.90	+54.8%	-$171.00
$98.17	+76.9%	-$171.00
$110.44	+99.0%	-$171.00

When traders use butterfly on KR

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

KR thesis for this butterfly

The market-implied 1-standard-deviation range for KR extends from approximately $50.84 on the downside to $60.16 on the upside. A KR long call butterfly is a pinning play: it pays maximum at the middle strike if KR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KR IV rank near 59.49% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on KR should anchor more to the directional view and the expected-move geometry. As a Consumer Defensive name, KR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KR-specific events.

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

Frequently asked questions

What is a butterfly on KR?: A butterfly on KR is the butterfly strategy applied to KR (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 KR stock trading near $55.50, the strikes shown on this page are snapped to the nearest listed KR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KR 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 KR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 29.31%), the computed maximum profit is $106.39 per contract and the computed maximum loss is -$171.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KR butterfly?: The breakeven for the KR butterfly priced on this page is roughly $53.71 and $56.29 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 KR market-implied 1-standard-deviation expected move is approximately 8.40%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on KR?: Butterflies on KR are pinning bets - traders use them when they expect KR 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 KR implied volatility affect this butterfly?: KR ATM IV is at 29.31% with IV rank near 59.49%, 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.