How are MTDR 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 MTDR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 41.20%), the computed maximum profit is $161.76 per contract and the computed maximum loss is -$77.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MTDR butterfly?

The breakeven for the MTDR butterfly priced on this page is roughly $58.28 and $61.73 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 MTDR market-implied 1-standard-deviation expected move is approximately 11.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MTDR implied volatility affect this butterfly?

MTDR ATM IV is at 41.20% with IV rank near 26.97%, 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.

MTDR Butterfly Strategy

MTDR (Matador Resources Company), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations; provides natural gas processing and oil transportation services; and offers oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. As of December 31, 2021, its estimated total proved oil and natural gas reserves were 323.4 million barrels of oil equivalent, including 181.3 million stock tank barrels of oil and 852.5 billion cubic feet of natural gas.

MTDR (Matador Resources Company) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $7.12B, a trailing P/E of 14.64, a beta of 0.80 versus the broader market, a 52-week range of 37.14-66.84, average daily share volume of 1.9M, a public-listing history dating back to 2012, approximately 452 full-time employees. These structural characteristics shape how MTDR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.80 places MTDR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MTDR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MTDR?

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 MTDR snapshot

As of May 15, 2026, spot at $60.19, ATM IV 41.20%, IV rank 26.97%, expected move 11.81%. The butterfly on MTDR 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 MTDR specifically: MTDR IV at 41.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a MTDR butterfly, with a market-implied 1-standard-deviation move of approximately 11.81% (roughly $7.11 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 MTDR expiries trade a higher absolute premium for lower per-day decay. Position sizing on MTDR should anchor to the underlying notional of $60.19 per share and to the trader's directional view on MTDR stock.

MTDR butterfly setup

The MTDR 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 MTDR near $60.19, the first option leg uses a $57.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MTDR 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 MTDR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$57.50	$4.65
Sell 2	Call	$60.00	$3.03
Buy 1	Call	$62.50	$2.18

MTDR butterfly risk and reward

Net Premium / Debit: -$77.50
Max Profit (per contract): $161.76
Max Loss (per contract): -$77.50
Breakeven(s): $58.28, $61.73
Risk / Reward Ratio: 2.087

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.

MTDR butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MTDR. 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%	-$77.50
$13.32	-77.9%	-$77.50
$26.62	-55.8%	-$77.50
$39.93	-33.7%	-$77.50
$53.24	-11.5%	-$77.50
$66.55	+10.6%	-$77.50
$79.85	+32.7%	-$77.50
$93.16	+54.8%	-$77.50
$106.47	+76.9%	-$77.50
$119.78	+99.0%	-$77.50

When traders use butterfly on MTDR

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

MTDR thesis for this butterfly

The market-implied 1-standard-deviation range for MTDR extends from approximately $53.08 on the downside to $67.30 on the upside. A MTDR long call butterfly is a pinning play: it pays maximum at the middle strike if MTDR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MTDR IV rank near 26.97% 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 MTDR at 41.20%. As a Energy name, MTDR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MTDR-specific events.

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

Frequently asked questions

What is a butterfly on MTDR?: A butterfly on MTDR is the butterfly strategy applied to MTDR (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 MTDR stock trading near $60.19, the strikes shown on this page are snapped to the nearest listed MTDR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MTDR 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 MTDR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 41.20%), the computed maximum profit is $161.76 per contract and the computed maximum loss is -$77.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MTDR butterfly?: The breakeven for the MTDR butterfly priced on this page is roughly $58.28 and $61.73 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 MTDR market-implied 1-standard-deviation expected move is approximately 11.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MTDR?: Butterflies on MTDR are pinning bets - traders use them when they expect MTDR 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 MTDR implied volatility affect this butterfly?: MTDR ATM IV is at 41.20% with IV rank near 26.97%, 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.