How are MDGL 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 MDGL butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.60%), the computed maximum profit is $2,040.47 per contract and the computed maximum loss is -$955.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MDGL butterfly?

The breakeven for the MDGL butterfly priced on this page is roughly $489.55 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 MDGL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MDGL implied volatility affect this butterfly?

MDGL ATM IV is at 37.60% with IV rank near 3.59%, 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.

MDGL Butterfly Strategy

MDGL (Madrigal Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Madrigal Pharmaceuticals, Inc. is a biopharmaceutical company in the clinical development phase, concentrating its efforts on discovering and commercializing innovative treatments for cardiovascular, metabolic, and liver disorders. Its most advanced drug candidate, resmetirom, functions as a liver-targeted selective thyroid hormone receptor-ß agonist, currently undergoing late-stage (Phase III) clinical trials for managing non-alcoholic steatohepatitis (NASH). The company's pipeline also features MGL-3745, which serves as a secondary or backup compound to resmetirom. Madrigal holds a collaborative agreement with Hoffmann-La Roche, encompassing research, development, and commercialization activities. The company's operations are based out of West Conshohocken, Pennsylvania.

MDGL (Madrigal Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $12.39B, a beta of -1.00 versus the broader market, a 52-week range of 351.32-615, average daily share volume of 343K, a public-listing history dating back to 2007, approximately 915 full-time employees. These structural characteristics shape how MDGL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -1.00 indicates MDGL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a butterfly on MDGL?

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.

MDGL snapshot

As of August 14, 2026, spot at $507.40, ATM IV 37.60%, IV rank 3.59%, expected move 10.78%. The butterfly on MDGL 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 MDGL specifically: MDGL IV at 37.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a MDGL butterfly, with a market-implied 1-standard-deviation move of approximately 10.78% (roughly $54.70 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 MDGL expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDGL should anchor to the underlying notional of $507.40 per share and to the trader's directional view on MDGL stock.

MDGL butterfly setup

The MDGL 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 MDGL at $507.40 on that close, the first option leg uses a $480.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MDGL 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 MDGL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$480.00	$40.70
Sell 2	Call	$510.00	$22.90
Buy 1	Call	$530.00	$14.65

MDGL butterfly risk and reward

Net Premium / Debit: -$955.00
Max Profit (per contract): $2,040.47
Max Loss (per contract): -$955.00
Breakeven(s): $489.55
Risk / Reward Ratio: 2.137

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.

MDGL butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MDGL. 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%	-$955.00
$112.20	-77.9%	-$955.00
$224.39	-55.8%	-$955.00
$336.57	-33.7%	-$955.00
$448.76	-11.6%	-$955.00
$560.95	+10.6%	+$45.00
$673.14	+32.7%	+$45.00
$785.32	+54.8%	+$45.00
$897.51	+76.9%	+$45.00
$1,009.70	+99.0%	+$45.00

When traders use butterfly on MDGL

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

MDGL thesis for this butterfly

The market-implied 1-standard-deviation range for MDGL extends from approximately $452.70 on the downside to $562.10 on the upside. A MDGL long call butterfly is a pinning play: it pays maximum at the middle strike if MDGL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MDGL IV rank near 3.59% 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 MDGL at 37.60%. As a Healthcare name, MDGL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDGL-specific events.

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

Frequently asked questions

What is a butterfly on MDGL?: A butterfly on MDGL is the butterfly strategy applied to MDGL (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 MDGL stock at $507.40 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed MDGL chain strike and the premiums come straight from that session's bid/ask midpoint.
How are MDGL 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 MDGL butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.60%), the computed maximum profit is $2,040.47 per contract and the computed maximum loss is -$955.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MDGL butterfly?: The breakeven for the MDGL butterfly priced on this page is roughly $489.55 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 MDGL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MDGL?: Butterflies on MDGL are pinning bets - traders use them when they expect MDGL 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 MDGL implied volatility affect this butterfly?: MDGL ATM IV is at 37.60% with IV rank near 3.59%, 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.