How are LUMN 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 LUMN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 73.31%), the computed maximum profit is $23.00 per contract and the computed maximum loss is -$27.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a LUMN butterfly?

The breakeven for the LUMN butterfly priced on this page is roughly $7.73 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 LUMN market-implied 1-standard-deviation expected move is approximately 21.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current LUMN implied volatility affect this butterfly?

LUMN ATM IV is at 73.31% with IV rank near 29.79%, 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.

LUMN Butterfly Strategy

LUMN (Lumen Technologies, Inc.), in the Communication Services sector, (Telecommunications Services industry), listed on NYSE.

Lumen Technologies, Inc. functions as an infrastructure-driven technology and telecommunications provider, offering a diverse array of integrated solutions to both commercial clients and residential customers throughout the United States and internationally. The company delivers these services through its Lumen, Quantum Fiber, and CenturyLink brands. Its business operations are segmented into two primary divisions: Business and Mass Markets. Lumen's comprehensive product suite includes compute and application services, such as cloud computing, IT management, unified communication and collaboration tools, colocation and data center facilities, content delivery networks, and managed security services. It also provides IP and data services, encompassing virtual private networks (VPN), Ethernet connectivity, general internet protocol services, and Voice over IP (VoIP). Additionally, the company furnishes fiber infrastructure services, which feature high-capacity optical wavelength networks, unlit optical fiber leasing, and related professional support.

LUMN (Lumen Technologies, Inc.) trades in the Communication Services sector, specifically Telecommunications Services, with a market capitalization of approximately $8.32B, a beta of 1.72 versus the broader market, a 52-week range of 3.37-11.95, average daily share volume of 14.8M, a public-listing history dating back to 1980, approximately 24K full-time employees. These structural characteristics shape how LUMN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.72 indicates LUMN has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on LUMN?

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 LUMN snapshot

As of June 30, 2026, spot at $7.67, ATM IV 73.31%, IV rank 29.79%, expected move 21.02%. The butterfly on LUMN 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 LUMN specifically: LUMN IV at 73.31% is on the cheap side of its 1-year range, which favors premium-buying structures like a LUMN butterfly, with a market-implied 1-standard-deviation move of approximately 21.02% (roughly $1.61 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 LUMN expiries trade a higher absolute premium for lower per-day decay. Position sizing on LUMN should anchor to the underlying notional of $7.67 per share and to the trader's directional view on LUMN stock.

LUMN butterfly setup

The LUMN 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 LUMN near $7.67, the first option leg uses a $7.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LUMN 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 LUMN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$7.50	$0.78
Sell 2	Call	$7.50	$0.78
Buy 1	Call	$8.00	$0.55

LUMN butterfly risk and reward

Net Premium / Debit: +$23.00
Max Profit (per contract): $23.00
Max Loss (per contract): -$27.00
Breakeven(s): $7.73
Risk / Reward Ratio: 0.852

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.

LUMN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on LUMN. 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	-99.9%	+$23.00
$1.70	-77.8%	+$23.00
$3.40	-55.7%	+$23.00
$5.09	-33.6%	+$23.00
$6.79	-11.5%	+$23.00
$8.48	+10.6%	-$27.00
$10.18	+32.7%	-$27.00
$11.87	+54.8%	-$27.00
$13.57	+76.9%	-$27.00
$15.26	+99.0%	-$27.00

When traders use butterfly on LUMN

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

LUMN thesis for this butterfly

The market-implied 1-standard-deviation range for LUMN extends from approximately $6.06 on the downside to $9.28 on the upside. A LUMN long call butterfly is a pinning play: it pays maximum at the middle strike if LUMN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LUMN IV rank near 29.79% 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 LUMN at 73.31%. As a Communication Services name, LUMN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LUMN-specific events.

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

Frequently asked questions

What is a butterfly on LUMN?: A butterfly on LUMN is the butterfly strategy applied to LUMN (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 LUMN stock trading near $7.67, the strikes shown on this page are snapped to the nearest listed LUMN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are LUMN 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 LUMN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 73.31%), the computed maximum profit is $23.00 per contract and the computed maximum loss is -$27.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a LUMN butterfly?: The breakeven for the LUMN butterfly priced on this page is roughly $7.73 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 LUMN market-implied 1-standard-deviation expected move is approximately 21.02%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on LUMN?: Butterflies on LUMN are pinning bets - traders use them when they expect LUMN 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 LUMN implied volatility affect this butterfly?: LUMN ATM IV is at 73.31% with IV rank near 29.79%, 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.