How are LGND 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 LGND butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.40%), the computed maximum profit is $1,171.61 per contract and the computed maximum loss is -$700.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a LGND butterfly?

The breakeven for the LGND butterfly priced on this page is roughly $303.00 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 LGND market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current LGND implied volatility affect this butterfly?

LGND ATM IV is at 37.40% with IV rank near 14.50%, 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.

LGND Butterfly Strategy

LGND (Ligand Pharmaceuticals Incorporated), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Ligand Pharmaceuticals Incorporated operates as a biopharmaceutical entity, primarily engaged in sourcing and advancing technologies to empower pharmaceutical companies globally in their efforts to discover and develop novel therapeutic solutions. Its diverse portfolio of commercialized products addresses a wide range of medical conditions. For hematologic malignancies, these include Kyprolis and Evomela, both targeting multiple myeloma, as well as Rylaze, a treatment for acute lymphoblastic leukemia and lymphoblastic lymphoma in both adult and pediatric patients. In the realm of infectious diseases, Ligand offers Veklury for moderate to severe COVID-19, Vaxneuvance for preventing invasive Streptococcus pneumoniae disease, and Pneumosil, a pneumococcal conjugate vaccine designed to protect children from pneumonia. Bone health solutions comprise Teriparatide injection for osteoporosis and Duavee for postmenopausal osteoporosis. Other key offerings include Zulresso, a Captisol-enabled formulation of brexanolone for postpartum depression; Nexterone, a Captisol-enabled amiodarone; and Noxafil-IV, a Captisol-enabled posaconazole for intravenous administration.

LGND (Ligand Pharmaceuticals Incorporated) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $5.88B, a trailing P/E of 29.83, a beta of 0.98 versus the broader market, a 52-week range of 149.51-326.63, average daily share volume of 318K, a public-listing history dating back to 1992, approximately 47 full-time employees. These structural characteristics shape how LGND stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.98 places LGND roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LGND pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on LGND?

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.

LGND snapshot

As of August 14, 2026, spot at $292.75, ATM IV 37.40%, IV rank 14.50%, expected move 10.72%. The butterfly on LGND 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 LGND specifically: LGND IV at 37.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a LGND butterfly, with a market-implied 1-standard-deviation move of approximately 10.72% (roughly $31.39 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 LGND expiries trade a higher absolute premium for lower per-day decay. Position sizing on LGND should anchor to the underlying notional of $292.75 per share and to the trader's directional view on LGND stock.

LGND butterfly setup

The LGND 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 LGND at $292.75 on that close, the first option leg uses a $280.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LGND 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 LGND shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$280.00	$21.95
Sell 2	Call	$290.00	$16.15
Buy 1	Call	$310.00	$7.35

LGND butterfly risk and reward

Net Premium / Debit: +$300.00
Max Profit (per contract): $1,171.61
Max Loss (per contract): -$700.00
Breakeven(s): $303.00
Risk / Reward Ratio: 1.674

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.

LGND butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on LGND. 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%	+$300.00
$64.74	-77.9%	+$300.00
$129.47	-55.8%	+$300.00
$194.19	-33.7%	+$300.00
$258.92	-11.6%	+$300.00
$323.65	+10.6%	-$700.00
$388.38	+32.7%	-$700.00
$453.10	+54.8%	-$700.00
$517.83	+76.9%	-$700.00
$582.56	+99.0%	-$700.00

When traders use butterfly on LGND

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

LGND thesis for this butterfly

The market-implied 1-standard-deviation range for LGND extends from approximately $261.36 on the downside to $324.14 on the upside. A LGND long call butterfly is a pinning play: it pays maximum at the middle strike if LGND settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LGND IV rank near 14.50% 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 LGND at 37.40%. As a Healthcare name, LGND options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LGND-specific events.

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

Frequently asked questions

What is a butterfly on LGND?: A butterfly on LGND is the butterfly strategy applied to LGND (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 LGND stock at $292.75 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LGND chain strike and the premiums come straight from that session's bid/ask midpoint.
How are LGND 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 LGND butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.40%), the computed maximum profit is $1,171.61 per contract and the computed maximum loss is -$700.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a LGND butterfly?: The breakeven for the LGND butterfly priced on this page is roughly $303.00 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 LGND market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on LGND?: Butterflies on LGND are pinning bets - traders use them when they expect LGND 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 LGND implied volatility affect this butterfly?: LGND ATM IV is at 37.40% with IV rank near 14.50%, 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.