How are MRCY 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 MRCY butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 54.10%), the computed maximum profit is $395.72 per contract and the computed maximum loss is -$100.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MRCY butterfly?

The breakeven for the MRCY butterfly priced on this page is roughly $88.50 and $96.50 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 MRCY market-implied 1-standard-deviation expected move is approximately 15.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MRCY implied volatility affect this butterfly?

MRCY ATM IV is at 54.10% with IV rank near 24.73%, 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.

MRCY Butterfly Strategy

MRCY (Mercury Systems, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.

Mercury Systems, Inc., a technology company, manufactures and sells components, products, modules, and subsystems for aerospace and defense industries in the United States, Europe, and the Asia Pacific. Its products and solutions are deployed in approximately 300 programs with 25 defense contractors and commercial aviation customers. The company offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing modules and boards, switched fabric boards, digital receiver boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video processing, and Ethernet and input-output boards; and integrated subsystems. It also designs and develops digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. Mercury Systems, Inc. was incorporated in 1981 and is headquartered in Andover, Massachusetts.

MRCY (Mercury Systems, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $5.55B, a beta of 0.83 versus the broader market, a 52-week range of 44.01-103.84, average daily share volume of 568K, a public-listing history dating back to 1998, approximately 2K full-time employees. These structural characteristics shape how MRCY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.83 places MRCY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a butterfly on MRCY?

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 MRCY snapshot

As of May 15, 2026, spot at $91.99, ATM IV 54.10%, IV rank 24.73%, expected move 15.51%. The butterfly on MRCY 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 MRCY specifically: MRCY IV at 54.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a MRCY butterfly, with a market-implied 1-standard-deviation move of approximately 15.51% (roughly $14.27 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 MRCY expiries trade a higher absolute premium for lower per-day decay. Position sizing on MRCY should anchor to the underlying notional of $91.99 per share and to the trader's directional view on MRCY stock.

MRCY butterfly setup

The MRCY 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 MRCY near $91.99, the first option leg uses a $87.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MRCY 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 MRCY shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$87.50	$8.70
Sell 2	Call	$92.50	$5.75
Buy 1	Call	$97.50	$3.80

MRCY butterfly risk and reward

Net Premium / Debit: -$100.00
Max Profit (per contract): $395.72
Max Loss (per contract): -$100.00
Breakeven(s): $88.50, $96.50
Risk / Reward Ratio: 3.957

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.

MRCY butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MRCY. 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%	-$100.00
$20.35	-77.9%	-$100.00
$40.69	-55.8%	-$100.00
$61.03	-33.7%	-$100.00
$81.36	-11.6%	-$100.00
$101.70	+10.6%	-$100.00
$122.04	+32.7%	-$100.00
$142.38	+54.8%	-$100.00
$162.72	+76.9%	-$100.00
$183.06	+99.0%	-$100.00

When traders use butterfly on MRCY

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

MRCY thesis for this butterfly

The market-implied 1-standard-deviation range for MRCY extends from approximately $77.72 on the downside to $106.26 on the upside. A MRCY long call butterfly is a pinning play: it pays maximum at the middle strike if MRCY settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MRCY IV rank near 24.73% 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 MRCY at 54.10%. As a Industrials name, MRCY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MRCY-specific events.

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

Frequently asked questions

What is a butterfly on MRCY?: A butterfly on MRCY is the butterfly strategy applied to MRCY (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 MRCY stock trading near $91.99, the strikes shown on this page are snapped to the nearest listed MRCY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MRCY 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 MRCY butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 54.10%), the computed maximum profit is $395.72 per contract and the computed maximum loss is -$100.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MRCY butterfly?: The breakeven for the MRCY butterfly priced on this page is roughly $88.50 and $96.50 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 MRCY market-implied 1-standard-deviation expected move is approximately 15.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MRCY?: Butterflies on MRCY are pinning bets - traders use them when they expect MRCY 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 MRCY implied volatility affect this butterfly?: MRCY ATM IV is at 54.10% with IV rank near 24.73%, 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.