How are MLI 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 MLI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.20%), the computed maximum profit is $436.97 per contract and the computed maximum loss is -$505.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MLI butterfly?

The breakeven for the MLI butterfly priced on this page is roughly $129.40 and $139.95 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 MLI market-implied 1-standard-deviation expected move is approximately 8.08%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MLI implied volatility affect this butterfly?

MLI ATM IV is at 28.20% with IV rank near 49.49%, 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.

MLI Butterfly Strategy

MLI (Mueller Industries, Inc.), in the Industrials sector, (Manufacturing - Metal Fabrication industry), listed on NYSE.

Mueller Industries, Inc. manufactures and sells copper, brass, aluminum, and plastic products in the United States, the United Kingdom, Canada, South Korea, the Middle East, China, and Mexico. It operates through three segments: Piping Systems, Industrial Metals, and Climate. The Piping Systems segment offers copper tubes, fittings, line sets, and pipe nipples; PEX plumbing and radiant systems; and plumbing-related fittings and plastic injection tooling. It also resells steel pipes, brass and plastic plumbing valves, malleable iron fittings and faucets, and plumbing specialties; and supplies water tubes. This segment sells its products to wholesalers in the plumbing and refrigeration markets, distributors to the manufactured housing and recreational vehicle industries, building material retailers, and air-conditioning original equipment manufacturers (OEMs). The Industrial Metals segment manufactures brass, bronze, and copper alloy rods; plumbing brass, valves, and fittings; cold-form aluminum and copper products; machining of aluminum, steel, brass, and cast iron impacts and castings; brass and aluminum forgings; brass, aluminum, and stainless-steel valves; fluid control solutions; and gas train assembles to OEMs in the industrial, construction, HVAC, plumbing, and refrigeration markets.

MLI (Mueller Industries, Inc.) trades in the Industrials sector, specifically Manufacturing - Metal Fabrication, with a market capitalization of approximately $15.43B, a trailing P/E of 17.98, a beta of 1.14 versus the broader market, a 52-week range of 72.16-141.51, average daily share volume of 728K, a public-listing history dating back to 1991, approximately 5K full-time employees. These structural characteristics shape how MLI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.14 places MLI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MLI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MLI?

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 MLI snapshot

As of May 15, 2026, spot at $136.26, ATM IV 28.20%, IV rank 49.49%, expected move 8.08%. The butterfly on MLI 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 MLI specifically: MLI IV at 28.20% 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 8.08% (roughly $11.02 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 MLI expiries trade a higher absolute premium for lower per-day decay. Position sizing on MLI should anchor to the underlying notional of $136.26 per share and to the trader's directional view on MLI stock.

MLI butterfly setup

The MLI 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 MLI near $136.26, the first option leg uses a $130.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MLI 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 MLI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$130.00	$8.95
Sell 2	Call	$135.00	$5.20
Buy 1	Call	$145.00	$1.50

MLI butterfly risk and reward

Net Premium / Debit: -$5.00
Max Profit (per contract): $436.97
Max Loss (per contract): -$505.00
Breakeven(s): $129.40, $139.95
Risk / Reward Ratio: 0.865

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.

MLI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MLI. 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%	-$5.00
$30.14	-77.9%	-$5.00
$60.26	-55.8%	-$5.00
$90.39	-33.7%	-$5.00
$120.52	-11.6%	-$5.00
$150.64	+10.6%	-$505.00
$180.77	+32.7%	-$505.00
$210.90	+54.8%	-$505.00
$241.02	+76.9%	-$505.00
$271.15	+99.0%	-$505.00

When traders use butterfly on MLI

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

MLI thesis for this butterfly

The market-implied 1-standard-deviation range for MLI extends from approximately $125.24 on the downside to $147.28 on the upside. A MLI long call butterfly is a pinning play: it pays maximum at the middle strike if MLI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MLI IV rank near 49.49% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on MLI should anchor more to the directional view and the expected-move geometry. As a Industrials name, MLI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MLI-specific events.

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

Frequently asked questions

What is a butterfly on MLI?: A butterfly on MLI is the butterfly strategy applied to MLI (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 MLI stock trading near $136.26, the strikes shown on this page are snapped to the nearest listed MLI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MLI 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 MLI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.20%), the computed maximum profit is $436.97 per contract and the computed maximum loss is -$505.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MLI butterfly?: The breakeven for the MLI butterfly priced on this page is roughly $129.40 and $139.95 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 MLI market-implied 1-standard-deviation expected move is approximately 8.08%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MLI?: Butterflies on MLI are pinning bets - traders use them when they expect MLI 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 MLI implied volatility affect this butterfly?: MLI ATM IV is at 28.20% with IV rank near 49.49%, 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.