How are MORN 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 MORN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 46.80%), the computed maximum profit is $515.54 per contract and the computed maximum loss is -$432.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MORN butterfly?

The breakeven for the MORN butterfly priced on this page is roughly $160.68 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 MORN market-implied 1-standard-deviation expected move is approximately 13.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MORN implied volatility affect this butterfly?

MORN ATM IV is at 46.80% with IV rank near 56.01%, 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.

MORN Butterfly Strategy

MORN (Morningstar, Inc.), in the Financial Services sector, (Financial - Data & Stock Exchanges industry), listed on NASDAQ.

Morningstar, Inc. operates as a leading global provider of independent investment research and insights, catering to clients across North America, Europe, Australia, and Asia. The firm delivers a comprehensive range of services, including sophisticated web-based analytical tools, extensive investment data, and specialized research focusing on fundamental equity, manager selection, and private capital markets. Additionally, Morningstar offers credit and fund ratings, ESG (environmental, social, and governance) ratings, and index solutions. Its product suite also encompasses various investment offerings, such as managed portfolios, data on both publicly traded and private companies, fixed income securities, and real-time global market information. These services are designed to serve a diverse client base, including financial advisors, asset management companies, retirement plan administrators and sponsors, alongside individual and institutional investors. Among its key offerings are: Morningstar Data: A vast repository of investment intelligence, encompassing equity fundamentals, managed investments, ESG factors, and market data.

MORN (Morningstar, Inc.) trades in the Financial Services sector, specifically Financial - Data & Stock Exchanges, with a market capitalization of approximately $5.88B, a trailing P/E of 15.01, a beta of 0.99 versus the broader market, a 52-week range of 141.49-316.71, average daily share volume of 514K, a public-listing history dating back to 2005, approximately 11K full-time employees. These structural characteristics shape how MORN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.99 places MORN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MORN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MORN?

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 MORN snapshot

As of June 30, 2026, spot at $156.30, ATM IV 46.80%, IV rank 56.01%, expected move 13.42%. The butterfly on MORN 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 17-day expiry.

Why this butterfly structure on MORN specifically: MORN IV at 46.80% 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 13.42% (roughly $20.97 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MORN expiries trade a higher absolute premium for lower per-day decay. Position sizing on MORN should anchor to the underlying notional of $156.30 per share and to the trader's directional view on MORN stock.

MORN butterfly setup

The MORN 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 MORN near $156.30, the first option leg uses a $150.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MORN chain at a 17-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 MORN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$150.00	$9.85
Sell 2	Call	$155.00	$6.50
Buy 1	Call	$165.00	$2.48

MORN butterfly risk and reward

Net Premium / Debit: +$67.50
Max Profit (per contract): $515.54
Max Loss (per contract): -$432.50
Breakeven(s): $160.68
Risk / Reward Ratio: 1.192

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.

MORN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MORN. 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%	+$67.50
$34.57	-77.9%	+$67.50
$69.13	-55.8%	+$67.50
$103.68	-33.7%	+$67.50
$138.24	-11.6%	+$67.50
$172.80	+10.6%	-$432.50
$207.36	+32.7%	-$432.50
$241.91	+54.8%	-$432.50
$276.47	+76.9%	-$432.50
$311.03	+99.0%	-$432.50

When traders use butterfly on MORN

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

MORN thesis for this butterfly

The market-implied 1-standard-deviation range for MORN extends from approximately $135.33 on the downside to $177.27 on the upside. A MORN long call butterfly is a pinning play: it pays maximum at the middle strike if MORN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MORN IV rank near 56.01% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on MORN should anchor more to the directional view and the expected-move geometry. As a Financial Services name, MORN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MORN-specific events.

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

Frequently asked questions

What is a butterfly on MORN?: A butterfly on MORN is the butterfly strategy applied to MORN (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 MORN stock trading near $156.30, the strikes shown on this page are snapped to the nearest listed MORN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MORN 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 MORN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 46.80%), the computed maximum profit is $515.54 per contract and the computed maximum loss is -$432.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MORN butterfly?: The breakeven for the MORN butterfly priced on this page is roughly $160.68 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 MORN market-implied 1-standard-deviation expected move is approximately 13.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MORN?: Butterflies on MORN are pinning bets - traders use them when they expect MORN 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 MORN implied volatility affect this butterfly?: MORN ATM IV is at 46.80% with IV rank near 56.01%, 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.