How are MU 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 MU butterfly priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 60.50%), the computed maximum profit is $4,361.50 per contract and the computed maximum loss is -$637.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MU butterfly?

The breakeven for the MU butterfly priced on this page is roughly $1,021.38 and $1,118.96 at expiration, derived from the September 30, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 17.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MU implied volatility affect this butterfly?

MU ATM IV is at 60.50% with IV rank near 24.10%, 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.

MU Butterfly Strategy

MU (Micron Technology, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Micron Technology, Inc. is a global leader specializing in the development, manufacture, and sale of advanced semiconductor memory and storage solutions. Its operations are structured across four primary business segments: Compute and Networking, Mobile, Storage, and Embedded. The company's product portfolio encompasses a range of memory and data storage technologies. These include high-speed, low-latency Dynamic Random Access Memory (DRAM) components for rapid data retrieval; non-volatile, re-programmable NAND flash storage devices; and fast-read, non-volatile, re-writable NOR memory chips. These innovative solutions are offered under its well-known Micron and Crucial brands, as well as through private label partnerships. Micron's extensive offerings cater to a diverse array of markets and applications.

MU (Micron Technology, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $1.20T, a trailing P/E of 14.16, a beta of 2.22 versus the broader market, a 52-week range of 165.5-1255, average daily share volume of 41.3M, a public-listing history dating back to 1984, approximately 53K full-time employees. These structural characteristics shape how MU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.22 indicates MU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. MU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on MU?

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.

MU snapshot

As of September 30, 2026, spot at $1,069.63, ATM IV 60.50%, IV rank 24.10%, expected move 17.34%. The butterfly on MU below is built from the September 30, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 30-day expiry.

Why this butterfly structure on MU specifically: MU IV at 60.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a MU butterfly, with a market-implied 1-standard-deviation move of approximately 17.34% (roughly $185.53 on the underlying). The 30-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MU expiries trade a higher absolute premium for lower per-day decay. Position sizing on MU should anchor to the underlying notional of $1,069.63 per share and to the trader's directional view on MU stock.

MU butterfly setup

The MU butterfly below is built from the September 30, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MU at $1,069.63 on that close, the first option leg uses a $1,015.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MU chain at a 30-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 MU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$1,015.00	$102.78
Sell 2	Call	$1,070.00	$74.75
Buy 1	Call	$1,125.00	$53.10

MU butterfly risk and reward

Net Premium / Debit: -$637.50
Max Profit (per contract): $4,361.50
Max Loss (per contract): -$637.50
Breakeven(s): $1,021.38, $1,118.96
Risk / Reward Ratio: 6.842

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.

MU butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on MU. 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%	-$637.50
$236.51	-77.9%	-$637.50
$473.01	-55.8%	-$637.50
$709.51	-33.7%	-$637.50
$946.01	-11.6%	-$637.50
$1,182.51	+10.6%	-$637.50
$1,419.01	+32.7%	-$637.50
$1,655.51	+54.8%	-$637.50
$1,892.01	+76.9%	-$637.50
$2,128.51	+99.0%	-$637.50

When traders use butterfly on MU

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

MU thesis for this butterfly

The market-implied 1-standard-deviation range for MU extends from approximately $884.10 on the downside to $1,255.16 on the upside. A MU long call butterfly is a pinning play: it pays maximum at the middle strike if MU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current MU IV rank near 24.10% 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 MU at 60.50%. As a Technology name, MU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MU-specific events.

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

Frequently asked questions

What is a butterfly on MU?: A butterfly on MU is the butterfly strategy applied to MU (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 MU stock at $1,069.63 on the September 30, 2026 close, the strikes shown on this page are snapped to the nearest listed MU chain strike and the premiums come straight from that session's bid/ask midpoint.
How are MU 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 MU butterfly priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 60.50%), the computed maximum profit is $4,361.50 per contract and the computed maximum loss is -$637.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MU butterfly?: The breakeven for the MU butterfly priced on this page is roughly $1,021.38 and $1,118.96 at expiration, derived from the September 30, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 17.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on MU?: Butterflies on MU are pinning bets - traders use them when they expect MU 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 MU implied volatility affect this butterfly?: MU ATM IV is at 60.50% with IV rank near 24.10%, 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.