How are NOC 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 NOC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.90%), the computed maximum profit is $1,686.39 per contract and the computed maximum loss is -$590.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a NOC butterfly?

The breakeven for the NOC butterfly priced on this page is roughly $520.90 and $559.10 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 NOC market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current NOC implied volatility affect this butterfly?

NOC ATM IV is at 28.90% with IV rank near 57.59%, 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.

NOC Butterfly Strategy

NOC (Northrop Grumman Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

Northrop Grumman Corporation operates as an aerospace and defense company worldwide. The company's Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, and produces weapons and mission systems. It offers products and services, such as integrated battle management systems, weapons systems and aircraft, and mission systems. This segment also provides command and control and weapons systems, including munitions and missiles; precision strike weapons; propulsion, such as air-breathing and hypersonic systems; gun systems and precision munitions; life cycle service and support for software, weapons systems, and aircraft; and logistics support, sustainment, operation, and modernization for air, sea, and ground systems.

NOC (Northrop Grumman Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $78.37B, a trailing P/E of 17.14, a beta of -0.11 versus the broader market, a 52-week range of 459.25-774, average daily share volume of 831K, a public-listing history dating back to 1981, approximately 97K full-time employees. These structural characteristics shape how NOC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -0.11 indicates NOC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NOC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on NOC?

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 NOC snapshot

As of May 15, 2026, spot at $539.52, ATM IV 28.90%, IV rank 57.59%, expected move 8.29%. The butterfly on NOC 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 NOC specifically: NOC IV at 28.90% 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 8.29% (roughly $44.70 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 NOC expiries trade a higher absolute premium for lower per-day decay. Position sizing on NOC should anchor to the underlying notional of $539.52 per share and to the trader's directional view on NOC stock.

NOC butterfly setup

The NOC 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 NOC near $539.52, the first option leg uses a $515.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NOC 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 NOC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$515.00	$34.35
Sell 2	Call	$540.00	$18.90
Buy 1	Call	$565.00	$9.35

NOC butterfly risk and reward

Net Premium / Debit: -$590.00
Max Profit (per contract): $1,686.39
Max Loss (per contract): -$590.00
Breakeven(s): $520.90, $559.10
Risk / Reward Ratio: 2.858

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.

NOC butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on NOC. 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%	-$590.00
$119.30	-77.9%	-$590.00
$238.59	-55.8%	-$590.00
$357.88	-33.7%	-$590.00
$477.17	-11.6%	-$590.00
$596.46	+10.6%	-$590.00
$715.75	+32.7%	-$590.00
$835.04	+54.8%	-$590.00
$954.33	+76.9%	-$590.00
$1,073.62	+99.0%	-$590.00

When traders use butterfly on NOC

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

NOC thesis for this butterfly

The market-implied 1-standard-deviation range for NOC extends from approximately $494.82 on the downside to $584.22 on the upside. A NOC long call butterfly is a pinning play: it pays maximum at the middle strike if NOC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current NOC IV rank near 57.59% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on NOC should anchor more to the directional view and the expected-move geometry. As a Industrials name, NOC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NOC-specific events.

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

Frequently asked questions

What is a butterfly on NOC?: A butterfly on NOC is the butterfly strategy applied to NOC (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 NOC stock trading near $539.52, the strikes shown on this page are snapped to the nearest listed NOC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are NOC 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 NOC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.90%), the computed maximum profit is $1,686.39 per contract and the computed maximum loss is -$590.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a NOC butterfly?: The breakeven for the NOC butterfly priced on this page is roughly $520.90 and $559.10 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 NOC market-implied 1-standard-deviation expected move is approximately 8.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on NOC?: Butterflies on NOC are pinning bets - traders use them when they expect NOC 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 NOC implied volatility affect this butterfly?: NOC ATM IV is at 28.90% with IV rank near 57.59%, 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.