How are LULU 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 LULU butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 56.08%), the computed maximum profit is $499.48 per contract and the computed maximum loss is -$85.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a LULU butterfly?

The breakeven for the LULU butterfly priced on this page is roughly $113.82 and $124.15 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 LULU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 16.08%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current LULU implied volatility affect this butterfly?

LULU ATM IV is at 56.08% with IV rank near 56.06%, 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.

LULU Butterfly Strategy

LULU (Lululemon Athletica Inc.), in the Consumer Cyclical sector, (Apparel - Retail industry), listed on NASDAQ.

Lululemon Athletica Inc., alongside its subsidiaries, specializes in the design, global distribution, and retail of athletic apparel and accessories for both women and men. Its business operations are structured into two main divisions: company-owned retail establishments and direct-to-consumer sales. The firm's offerings encompass a range of clothing such as pants, shorts, tops, and jackets, all crafted for promoting a healthy lifestyle and facilitating athletic endeavors. These activities span yoga, running, training, and other physically demanding pursuits. Beyond apparel, Lululemon also supplies fitness-related accessories and a selection of footwear. Customers can acquire Lululemon products through numerous channels.

LULU (Lululemon Athletica Inc.) trades in the Consumer Cyclical sector, specifically Apparel - Retail, with a market capitalization of approximately $13.73B, a trailing P/E of 9.56, a beta of 0.86 versus the broader market, a 52-week range of 104.44-225.98, average daily share volume of 3.3M, a public-listing history dating back to 2007, approximately 39K full-time employees. These structural characteristics shape how LULU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.86 places LULU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.56 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.

What is a butterfly on LULU?

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.

LULU snapshot

As of August 14, 2026, spot at $119.44, ATM IV 56.08%, IV rank 56.06%, expected move 16.08%. The butterfly on LULU 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 28-day expiry.

Why this butterfly structure on LULU specifically: LULU IV at 56.08% 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 16.08% (roughly $19.20 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 LULU expiries trade a higher absolute premium for lower per-day decay. Position sizing on LULU should anchor to the underlying notional of $119.44 per share and to the trader's directional view on LULU stock.

LULU butterfly setup

The LULU 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 LULU at $119.44 on that close, the first option leg uses a $113.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LULU 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 LULU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$113.00	$11.28
Sell 2	Call	$119.00	$7.90
Buy 1	Call	$125.00	$5.38

LULU butterfly risk and reward

Net Premium / Debit: -$85.00
Max Profit (per contract): $499.48
Max Loss (per contract): -$85.00
Breakeven(s): $113.82, $124.15
Risk / Reward Ratio: 5.876

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.

LULU butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on LULU. 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%	-$85.00
$26.42	-77.9%	-$85.00
$52.83	-55.8%	-$85.00
$79.23	-33.7%	-$85.00
$105.64	-11.6%	-$85.00
$132.05	+10.6%	-$85.00
$158.46	+32.7%	-$85.00
$184.86	+54.8%	-$85.00
$211.27	+76.9%	-$85.00
$237.68	+99.0%	-$85.00

When traders use butterfly on LULU

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

LULU thesis for this butterfly

The market-implied 1-standard-deviation range for LULU extends from approximately $100.24 on the downside to $138.64 on the upside. A LULU long call butterfly is a pinning play: it pays maximum at the middle strike if LULU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LULU IV rank near 56.06% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on LULU should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, LULU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LULU-specific events.

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

Frequently asked questions

What is a butterfly on LULU?: A butterfly on LULU is the butterfly strategy applied to LULU (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 LULU stock at $119.44 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LULU chain strike and the premiums come straight from that session's bid/ask midpoint.
How are LULU 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 LULU butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 56.08%), the computed maximum profit is $499.48 per contract and the computed maximum loss is -$85.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a LULU butterfly?: The breakeven for the LULU butterfly priced on this page is roughly $113.82 and $124.15 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 LULU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 16.08%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on LULU?: Butterflies on LULU are pinning bets - traders use them when they expect LULU 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 LULU implied volatility affect this butterfly?: LULU ATM IV is at 56.08% with IV rank near 56.06%, 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.