How are KTOS 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 KTOS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 69.00%), the computed maximum profit is $184.79 per contract and the computed maximum loss is -$105.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KTOS butterfly?

The breakeven for the KTOS butterfly priced on this page is roughly $50.85 and $54.95 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 KTOS market-implied 1-standard-deviation expected move is approximately 19.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KTOS implied volatility affect this butterfly?

KTOS ATM IV is at 69.00% with IV rank near 55.21%, 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.

KTOS Butterfly Strategy

KTOS (Kratos Defense & Security Solutions, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.

Kratos Defense & Security Solutions, Inc. operates as a government contractor of the U.S. Department of Defense. The company operates through two segments, Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment offers microwave electronic products, space and satellite communications, training and cybersecurity/ warfare, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne systems. It serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers.

KTOS (Kratos Defense & Security Solutions, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $9.84B, a trailing P/E of 315.65, a beta of 1.06 versus the broader market, a 52-week range of 33.56-134, average daily share volume of 4.4M, a public-listing history dating back to 1999, approximately 4K full-time employees. These structural characteristics shape how KTOS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.06 places KTOS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 315.65 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.

What is a butterfly on KTOS?

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 KTOS snapshot

As of May 13, 2026, spot at $53.16, ATM IV 69.00%, IV rank 55.21%, expected move 19.78%. The butterfly on KTOS 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 28-day expiry.

Why this butterfly structure on KTOS specifically: KTOS IV at 69.00% 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 19.78% (roughly $10.52 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KTOS expiries trade a higher absolute premium for lower per-day decay. Position sizing on KTOS should anchor to the underlying notional of $53.16 per share and to the trader's directional view on KTOS stock.

KTOS butterfly setup

The KTOS 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 KTOS near $53.16, the first option leg uses a $51.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KTOS chain at a 28-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 KTOS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$51.00	$4.40
Sell 2	Call	$53.00	$3.40
Buy 1	Call	$56.00	$2.45

KTOS butterfly risk and reward

Net Premium / Debit: -$5.00
Max Profit (per contract): $184.79
Max Loss (per contract): -$105.00
Breakeven(s): $50.85, $54.95
Risk / Reward Ratio: 1.760

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.

KTOS butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on KTOS. 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%	-$5.00
$11.76	-77.9%	-$5.00
$23.52	-55.8%	-$5.00
$35.27	-33.7%	-$5.00
$47.02	-11.5%	-$5.00
$58.77	+10.6%	-$105.00
$70.53	+32.7%	-$105.00
$82.28	+54.8%	-$105.00
$94.03	+76.9%	-$105.00
$105.79	+99.0%	-$105.00

When traders use butterfly on KTOS

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

KTOS thesis for this butterfly

The market-implied 1-standard-deviation range for KTOS extends from approximately $42.64 on the downside to $63.68 on the upside. A KTOS long call butterfly is a pinning play: it pays maximum at the middle strike if KTOS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current KTOS IV rank near 55.21% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on KTOS should anchor more to the directional view and the expected-move geometry. As a Industrials name, KTOS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KTOS-specific events.

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

Frequently asked questions

What is a butterfly on KTOS?: A butterfly on KTOS is the butterfly strategy applied to KTOS (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 KTOS stock trading near $53.16, the strikes shown on this page are snapped to the nearest listed KTOS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KTOS 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 KTOS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 69.00%), the computed maximum profit is $184.79 per contract and the computed maximum loss is -$105.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KTOS butterfly?: The breakeven for the KTOS butterfly priced on this page is roughly $50.85 and $54.95 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 KTOS market-implied 1-standard-deviation expected move is approximately 19.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on KTOS?: Butterflies on KTOS are pinning bets - traders use them when they expect KTOS 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 KTOS implied volatility affect this butterfly?: KTOS ATM IV is at 69.00% with IV rank near 55.21%, 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.