How are MSM 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 MSM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 44.20%), the computed maximum profit is $379.34 per contract and the computed maximum loss is -$90.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MSM butterfly?

The breakeven for the MSM butterfly priced on this page is roughly $115.88 and $124.10 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 MSM market-implied 1-standard-deviation expected move is approximately 12.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MSM implied volatility affect this butterfly?

MSM ATM IV is at 44.20% with IV rank near 90.43%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

MSM Butterfly Strategy

MSM (MSC Industrial Direct Co., Inc.), in the Industrials sector, (Industrial - Distribution industry), listed on NYSE.

MSC Industrial Direct Co., Inc., along with its affiliated entities, specializes in the distribution of industrial supplies, primarily focusing on metalworking, maintenance, repair, and operations (MRO) products and services. Its market reach spans the United States, Canada, Mexico, and the United Kingdom. The company's extensive catalog of MRO products encompasses a wide array of items, including cutting implements, precision measuring devices, specialized tooling components, various metalworking goods, fasteners, sheet and bar stock, raw materials, abrasive products, a diverse selection of machinery, hand, and power tools, essential safety and janitorial provisions, plumbing fixtures, materials handling equipment, power transmission parts, and electrical components. Offering approximately 1.9 million distinct stock-keeping units (SKUs), MSC Industrial Direct provides access to its offerings through multiple channels. These include traditional catalogs and brochures, comprehensive e-commerce platforms (such as its flagship website, mscdirect.com), advanced inventory management solutions for clients, and direct interaction via call centers and local branches. Its robust operational infrastructure features a distribution network comprising 28 branch offices, 11 customer fulfillment centers, and seven regional inventory centers.

MSM (MSC Industrial Direct Co., Inc.) trades in the Industrials sector, specifically Industrial - Distribution, with a market capitalization of approximately $6.60B, a trailing P/E of 31.86, a beta of 0.83 versus the broader market, a 52-week range of 78.8-120.2, average daily share volume of 696K, a public-listing history dating back to 1995, approximately 7K full-time employees. These structural characteristics shape how MSM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.83 places MSM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MSM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MSM?

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 MSM snapshot

As of June 30, 2026, spot at $119.09, ATM IV 44.20%, IV rank 90.43%, expected move 12.67%. The butterfly on MSM 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 MSM specifically: MSM IV at 44.20% is rich versus its 1-year range, which makes a premium-buying MSM butterfly relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 12.67% (roughly $15.09 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 MSM expiries trade a higher absolute premium for lower per-day decay. Position sizing on MSM should anchor to the underlying notional of $119.09 per share and to the trader's directional view on MSM stock.

MSM butterfly setup

The MSM 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 MSM near $119.09, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MSM 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 MSM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$115.00	$6.05
Sell 2	Call	$120.00	$3.70
Buy 1	Call	$125.00	$2.25

MSM butterfly risk and reward

Net Premium / Debit: -$90.00
Max Profit (per contract): $379.34
Max Loss (per contract): -$90.00
Breakeven(s): $115.88, $124.10
Risk / Reward Ratio: 4.215

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.

MSM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MSM. 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%	-$90.00
$26.34	-77.9%	-$90.00
$52.67	-55.8%	-$90.00
$79.00	-33.7%	-$90.00
$105.33	-11.6%	-$90.00
$131.66	+10.6%	-$90.00
$157.99	+32.7%	-$90.00
$184.32	+54.8%	-$90.00
$210.65	+76.9%	-$90.00
$236.98	+99.0%	-$90.00

When traders use butterfly on MSM

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

MSM thesis for this butterfly

The market-implied 1-standard-deviation range for MSM extends from approximately $104.00 on the downside to $134.18 on the upside. A MSM long call butterfly is a pinning play: it pays maximum at the middle strike if MSM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MSM IV rank near 90.43% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MSM at 44.20%. As a Industrials name, MSM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MSM-specific events.

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

Frequently asked questions

What is a butterfly on MSM?: A butterfly on MSM is the butterfly strategy applied to MSM (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 MSM stock trading near $119.09, the strikes shown on this page are snapped to the nearest listed MSM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MSM 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 MSM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 44.20%), the computed maximum profit is $379.34 per contract and the computed maximum loss is -$90.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MSM butterfly?: The breakeven for the MSM butterfly priced on this page is roughly $115.88 and $124.10 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 MSM market-implied 1-standard-deviation expected move is approximately 12.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MSM?: Butterflies on MSM are pinning bets - traders use them when they expect MSM 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 MSM implied volatility affect this butterfly?: MSM ATM IV is at 44.20% with IV rank near 90.43%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.