How are MCK 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 MCK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.80%), the computed maximum profit is $2,662.78 per contract and the computed maximum loss is -$1,315.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MCK butterfly?

The breakeven for the MCK butterfly priced on this page is roughly $732.66 and $786.85 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 MCK market-implied 1-standard-deviation expected move is approximately 7.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MCK implied volatility affect this butterfly?

MCK ATM IV is at 24.80% with IV rank near 12.85%, 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.

MCK Butterfly Strategy

MCK (McKesson Corporation), in the Healthcare sector, (Medical - Distribution industry), listed on NYSE.

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions (RxTS). The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies.

MCK (McKesson Corporation) trades in the Healthcare sector, specifically Medical - Distribution, with a market capitalization of approximately $88.61B, a trailing P/E of 18.90, a beta of 0.36 versus the broader market, a 52-week range of 637-999, average daily share volume of 858K, a public-listing history dating back to 1994, approximately 44K full-time employees. These structural characteristics shape how MCK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.36 indicates MCK has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MCK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MCK?

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 MCK snapshot

As of May 15, 2026, spot at $763.61, ATM IV 24.80%, IV rank 12.85%, expected move 7.11%. The butterfly on MCK 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 34-day expiry.

Why this butterfly structure on MCK specifically: MCK IV at 24.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a MCK butterfly, with a market-implied 1-standard-deviation move of approximately 7.11% (roughly $54.29 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MCK expiries trade a higher absolute premium for lower per-day decay. Position sizing on MCK should anchor to the underlying notional of $763.61 per share and to the trader's directional view on MCK stock.

MCK butterfly setup

The MCK 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 MCK near $763.61, the first option leg uses a $730.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MCK chain at a 34-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 MCK shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$730.00	$45.30
Sell 2	Call	$760.00	$25.70
Buy 1	Call	$800.00	$9.25

MCK butterfly risk and reward

Net Premium / Debit: -$315.00
Max Profit (per contract): $2,662.78
Max Loss (per contract): -$1,315.00
Breakeven(s): $732.66, $786.85
Risk / Reward Ratio: 2.025

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.

MCK butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MCK. 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%	-$315.00
$168.85	-77.9%	-$315.00
$337.68	-55.8%	-$315.00
$506.52	-33.7%	-$315.00
$675.36	-11.6%	-$315.00
$844.20	+10.6%	-$1,315.00
$1,013.03	+32.7%	-$1,315.00
$1,181.87	+54.8%	-$1,315.00
$1,350.71	+76.9%	-$1,315.00
$1,519.55	+99.0%	-$1,315.00

When traders use butterfly on MCK

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

MCK thesis for this butterfly

The market-implied 1-standard-deviation range for MCK extends from approximately $709.32 on the downside to $817.90 on the upside. A MCK long call butterfly is a pinning play: it pays maximum at the middle strike if MCK settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MCK IV rank near 12.85% 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 MCK at 24.80%. As a Healthcare name, MCK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MCK-specific events.

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

Frequently asked questions

What is a butterfly on MCK?: A butterfly on MCK is the butterfly strategy applied to MCK (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 MCK stock trading near $763.61, the strikes shown on this page are snapped to the nearest listed MCK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MCK 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 MCK butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.80%), the computed maximum profit is $2,662.78 per contract and the computed maximum loss is -$1,315.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MCK butterfly?: The breakeven for the MCK butterfly priced on this page is roughly $732.66 and $786.85 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 MCK market-implied 1-standard-deviation expected move is approximately 7.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MCK?: Butterflies on MCK are pinning bets - traders use them when they expect MCK 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 MCK implied volatility affect this butterfly?: MCK ATM IV is at 24.80% with IV rank near 12.85%, 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.