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 end-of-day chain at a 30-day expiry (ATM IV 57.56%), the computed maximum profit is $48.25 per contract and the computed maximum loss is -$1.50 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 $12.98 and $14.02 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 RKT market-implied 1-standard-deviation expected move is approximately 16.50%; 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 57.56% with IV rank near 24.53%, 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. engages in the tech-driven real estate, mortgage, and e-Commerce businesses in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company's solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; Rocket Auto, an automotive retail marketplace that provides centralized and virtual car sales support to online car purchasing platforms; and Rocket Loans, an online-based personal loans business. It also offer Core Digital Media, a digital social and display advertiser in the mortgage, insurance, and education sectors; Rocket Solar, which connect homeowners with digital financing solutions through a team of trained solar advisors; Truebill, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a technology services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; and Edison Financial, a digital mortgage broker. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan.

RKT (Rocket Companies, Inc.) trades in the Financial Services sector, specifically Financial - Mortgages, with a market capitalization of approximately $39.08B, a trailing P/E of 163.54, a beta of 2.25 versus the broader market, a 52-week range of 12.03-24.36, average daily share volume of 25.9M, a public-listing history dating back to 2020, approximately 14K 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 2.25 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 163.54 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.

Current RKT snapshot

As of May 15, 2026, spot at $13.43, ATM IV 57.56%, IV rank 24.53%, expected move 16.50%. The butterfly on RKT 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 28-day expiry.

Why this butterfly structure on RKT specifically: RKT IV at 57.56% 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 16.50% (roughly $2.22 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 $13.43 per share and to the trader's directional view on RKT stock.

RKT butterfly setup

The RKT 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 RKT near $13.43, the first option leg uses a $13.00 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	$13.00	$1.07
Sell 2	Call	$13.50	$0.85
Buy 1	Call	$14.00	$0.64

RKT butterfly risk and reward

Net Premium / Debit: -$1.50
Max Profit (per contract): $48.25
Max Loss (per contract): -$1.50
Breakeven(s): $12.98, $14.02
Risk / Reward Ratio: 32.169

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.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-99.9%	-$1.50
$2.98	-77.8%	-$1.50
$5.95	-55.7%	-$1.50
$8.92	-33.6%	-$1.50
$11.88	-11.5%	-$1.50
$14.85	+10.6%	-$1.50
$17.82	+32.7%	-$1.50
$20.79	+54.8%	-$1.50
$23.76	+76.9%	-$1.50
$26.73	+99.0%	-$1.50

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 $11.21 on the downside to $15.65 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 24.53% 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 57.56%. 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 trading near $13.43, the strikes shown on this page are snapped to the nearest listed RKT chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 57.56%), the computed maximum profit is $48.25 per contract and the computed maximum loss is -$1.50 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 $12.98 and $14.02 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 RKT market-implied 1-standard-deviation expected move is approximately 16.50%; 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 57.56% with IV rank near 24.53%, 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.