How are RDN 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 RDN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 19.60%), the computed maximum profit is $110.48 per contract and the computed maximum loss is -$87.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RDN butterfly?

The breakeven for the RDN butterfly priced on this page is roughly $36.87 and $39.13 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 RDN market-implied 1-standard-deviation expected move is approximately 5.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RDN implied volatility affect this butterfly?

RDN ATM IV is at 19.60% with IV rank near 2.15%, 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.

RDN Butterfly Strategy

RDN (Radian Group Inc.), in the Financial Services sector, (Insurance - Specialty industry), listed on NYSE.

Operating across the United States, Radian Group Inc. and its various subsidiaries are key players in the mortgage and real estate services sector. Through its Mortgage segment, the company delivers crucial credit-related insurance, predominantly private mortgage insurance for primary residential loans. This division also furnishes a suite of credit risk management, contract underwriting, and fulfillment services. Its principal clientele includes a broad spectrum of mortgage originators, ranging from large mortgage and commercial banks to savings institutions, credit unions, and community banks. Radian's Homegenius segment provides an extensive array of services. These encompass comprehensive title services, such as both insured and uninsured title solutions, tax and title data management, centralized document recording, retrieval, and default curative actions, along with deed and property reports.

RDN (Radian Group Inc.) trades in the Financial Services sector, specifically Insurance - Specialty, with a market capitalization of approximately $4.99B, a trailing P/E of 9.14, a beta of 0.74 versus the broader market, a 52-week range of 31.5-38.84, average daily share volume of 1.2M, a public-listing history dating back to 1992, approximately 1K full-time employees. These structural characteristics shape how RDN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.74 places RDN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.14 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. RDN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on RDN?

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 RDN snapshot

As of June 30, 2026, spot at $37.78, ATM IV 19.60%, IV rank 2.15%, expected move 5.62%. The butterfly on RDN 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 52-day expiry.

Why this butterfly structure on RDN specifically: RDN IV at 19.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a RDN butterfly, with a market-implied 1-standard-deviation move of approximately 5.62% (roughly $2.12 on the underlying). The 52-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDN expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDN should anchor to the underlying notional of $37.78 per share and to the trader's directional view on RDN stock.

RDN butterfly setup

The RDN 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 RDN near $37.78, the first option leg uses a $36.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDN chain at a 52-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 RDN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$36.00	$3.05
Sell 2	Call	$38.00	$1.55
Buy 1	Call	$40.00	$0.92

RDN butterfly risk and reward

Net Premium / Debit: -$87.00
Max Profit (per contract): $110.48
Max Loss (per contract): -$87.00
Breakeven(s): $36.87, $39.13
Risk / Reward Ratio: 1.270

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.

RDN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on RDN. 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%	-$87.00
$8.36	-77.9%	-$87.00
$16.71	-55.8%	-$87.00
$25.07	-33.7%	-$87.00
$33.42	-11.5%	-$87.00
$41.77	+10.6%	-$87.00
$50.12	+32.7%	-$87.00
$58.48	+54.8%	-$87.00
$66.83	+76.9%	-$87.00
$75.18	+99.0%	-$87.00

When traders use butterfly on RDN

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

RDN thesis for this butterfly

The market-implied 1-standard-deviation range for RDN extends from approximately $35.66 on the downside to $39.90 on the upside. A RDN long call butterfly is a pinning play: it pays maximum at the middle strike if RDN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RDN IV rank near 2.15% 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 RDN at 19.60%. As a Financial Services name, RDN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDN-specific events.

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

Frequently asked questions

What is a butterfly on RDN?: A butterfly on RDN is the butterfly strategy applied to RDN (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 RDN stock trading near $37.78, the strikes shown on this page are snapped to the nearest listed RDN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RDN 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 RDN butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 19.60%), the computed maximum profit is $110.48 per contract and the computed maximum loss is -$87.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RDN butterfly?: The breakeven for the RDN butterfly priced on this page is roughly $36.87 and $39.13 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 RDN market-implied 1-standard-deviation expected move is approximately 5.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on RDN?: Butterflies on RDN are pinning bets - traders use them when they expect RDN 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 RDN implied volatility affect this butterfly?: RDN ATM IV is at 19.60% with IV rank near 2.15%, 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.