How are RKT 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 RKT butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.07%), the computed maximum profit is $44.85 per contract and the computed maximum loss is -$53.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RKT butterfly?

The breakeven for the RKT butterfly priced on this page is roughly $14.02 at expiration, derived from the August 14, 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 RKT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RKT implied volatility affect this butterfly?

RKT ATM IV is at 50.07% with IV rank near 13.32%, 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.

RKT Butterfly Strategy

RKT (Rocket Companies, Inc.), in the Financial Services sector, (Financial - Mortgages industry), listed on NYSE.

Rocket Companies, Inc. is a leading enterprise focused on leveraging technology across the real estate, mortgage, and e-commerce industries, with operations spanning the United States and Canada. The firm organizes its activities into two principal divisions: direct engagement with consumers and a collaborative partner network. Its extensive suite of solutions encompasses: Rocket Mortgage: A primary provider of mortgage lending services. Amrock: Offering vital services such as title insurance, property valuation, and transaction settlement. Rocket Homes: A comprehensive platform for home searching and a referral network connecting clients with real estate agents, employing technology to simplify the home buying and selling journey. Rocket Auto: An online marketplace for automotive retail that facilitates centralized and virtual support for car purchases.

RKT (Rocket Companies, Inc.) trades in the Financial Services sector, specifically Financial - Mortgages, with a market capitalization of approximately $39.68B, a trailing P/E of 84.47, a beta of 2.21 versus the broader market, a 52-week range of 12.17-24.36, average daily share volume of 28.4M, a public-listing history dating back to 2020, approximately 24K full-time employees. These structural characteristics shape how RKT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.21 indicates RKT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 84.47 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. RKT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on RKT?

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.

RKT snapshot

As of August 14, 2026, spot at $14.70, ATM IV 50.07%, IV rank 13.32%, expected move 14.36%. The butterfly on RKT below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.

Why this butterfly structure on RKT specifically: RKT IV at 50.07% is on the cheap side of its 1-year range, which favors premium-buying structures like a RKT butterfly, with a market-implied 1-standard-deviation move of approximately 14.36% (roughly $2.11 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RKT expiries trade a higher absolute premium for lower per-day decay. Position sizing on RKT should anchor to the underlying notional of $14.70 per share and to the trader's directional view on RKT stock.

RKT butterfly setup

The RKT butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With RKT at $14.70 on that close, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RKT chain at a 28-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 RKT shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$14.00	$1.28
Sell 2	Call	$14.50	$0.87
Buy 1	Call	$15.50	$0.50

RKT butterfly risk and reward

Net Premium / Debit: -$3.50
Max Profit (per contract): $44.85
Max Loss (per contract): -$53.50
Breakeven(s): $14.02
Risk / Reward Ratio: 0.838

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.

RKT butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on RKT. 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	-99.9%	-$3.50
$3.26	-77.8%	-$3.50
$6.51	-55.7%	-$3.50
$9.76	-33.6%	-$3.50
$13.01	-11.5%	-$3.50
$16.26	+10.6%	-$53.50
$19.50	+32.7%	-$53.50
$22.75	+54.8%	-$53.50
$26.00	+76.9%	-$53.50
$29.25	+99.0%	-$53.50

When traders use butterfly on RKT

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

RKT thesis for this butterfly

The market-implied 1-standard-deviation range for RKT extends from approximately $12.59 on the downside to $16.81 on the upside. A RKT long call butterfly is a pinning play: it pays maximum at the middle strike if RKT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RKT IV rank near 13.32% 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 RKT at 50.07%. As a Financial Services name, RKT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RKT-specific events.

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

Frequently asked questions

What is a butterfly on RKT?: A butterfly on RKT is the butterfly strategy applied to RKT (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 RKT stock at $14.70 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed RKT chain strike and the premiums come straight from that session's bid/ask midpoint.
How are RKT 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 RKT butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 50.07%), the computed maximum profit is $44.85 per contract and the computed maximum loss is -$53.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RKT butterfly?: The breakeven for the RKT butterfly priced on this page is roughly $14.02 at expiration, derived from the August 14, 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 RKT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on RKT?: Butterflies on RKT are pinning bets - traders use them when they expect RKT 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 RKT implied volatility affect this butterfly?: RKT ATM IV is at 50.07% with IV rank near 13.32%, 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.