How are ROKU 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 ROKU butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 45.01%), the computed maximum profit is $533.48 per contract and the computed maximum loss is -$145.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ROKU butterfly?

The breakeven for the ROKU butterfly priced on this page is roughly $118.26 and $129.55 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 ROKU market-implied 1-standard-deviation expected move is approximately 12.90%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ROKU implied volatility affect this butterfly?

ROKU ATM IV is at 45.01% with IV rank near 10.75%, 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.

ROKU Butterfly Strategy

ROKU (Roku, Inc.), in the Communication Services sector, (Entertainment industry), listed on NASDAQ.

Roku, Inc., together with its subsidiaries, operates a TV streaming platform. The company operates in two segments, Platform and Player. Its platform allows users to discover and access various movies and TV episodes, as well as live TV, news sports, shows, and others. As of December 31, 2021, the company had 60.1 million active accounts. It also provides digital and video advertising, content distribution, subscription, and billing services, as well as other commerce transactions, and brand sponsorship and promotions; and manufactures, sells, and licenses smart TVs under the Roku TV name. In addition, the company offers streaming players, and audio products and accessories under the Roku brand name; and sells branded channel buttons on remote controls of streaming devices.

ROKU (Roku, Inc.) trades in the Communication Services sector, specifically Entertainment, with a market capitalization of approximately $18.56B, a trailing P/E of 92.01, a beta of 2.04 versus the broader market, a 52-week range of 67.668-131.39, average daily share volume of 3.3M, a public-listing history dating back to 2017, approximately 3K full-time employees. These structural characteristics shape how ROKU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.04 indicates ROKU 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 92.01 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.

What is a butterfly on ROKU?

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 ROKU snapshot

As of May 15, 2026, spot at $124.41, ATM IV 45.01%, IV rank 10.75%, expected move 12.90%. The butterfly on ROKU 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 ROKU specifically: ROKU IV at 45.01% is on the cheap side of its 1-year range, which favors premium-buying structures like a ROKU butterfly, with a market-implied 1-standard-deviation move of approximately 12.90% (roughly $16.06 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 ROKU expiries trade a higher absolute premium for lower per-day decay. Position sizing on ROKU should anchor to the underlying notional of $124.41 per share and to the trader's directional view on ROKU stock.

ROKU butterfly setup

The ROKU 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 ROKU near $124.41, the first option leg uses a $118.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ROKU 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 ROKU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$118.00	$9.95
Sell 2	Call	$124.00	$6.38
Buy 1	Call	$131.00	$3.26

ROKU butterfly risk and reward

Net Premium / Debit: -$45.50
Max Profit (per contract): $533.48
Max Loss (per contract): -$145.50
Breakeven(s): $118.26, $129.55
Risk / Reward Ratio: 3.667

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.

ROKU butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ROKU. 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%	-$45.50
$27.52	-77.9%	-$45.50
$55.02	-55.8%	-$45.50
$82.53	-33.7%	-$45.50
$110.04	-11.6%	-$45.50
$137.54	+10.6%	-$145.50
$165.05	+32.7%	-$145.50
$192.56	+54.8%	-$145.50
$220.06	+76.9%	-$145.50
$247.57	+99.0%	-$145.50

When traders use butterfly on ROKU

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

ROKU thesis for this butterfly

The market-implied 1-standard-deviation range for ROKU extends from approximately $108.35 on the downside to $140.47 on the upside. A ROKU long call butterfly is a pinning play: it pays maximum at the middle strike if ROKU settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ROKU IV rank near 10.75% 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 ROKU at 45.01%. As a Communication Services name, ROKU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ROKU-specific events.

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

Frequently asked questions

What is a butterfly on ROKU?: A butterfly on ROKU is the butterfly strategy applied to ROKU (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 ROKU stock trading near $124.41, the strikes shown on this page are snapped to the nearest listed ROKU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ROKU 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 ROKU butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 45.01%), the computed maximum profit is $533.48 per contract and the computed maximum loss is -$145.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ROKU butterfly?: The breakeven for the ROKU butterfly priced on this page is roughly $118.26 and $129.55 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 ROKU market-implied 1-standard-deviation expected move is approximately 12.90%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ROKU?: Butterflies on ROKU are pinning bets - traders use them when they expect ROKU 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 ROKU implied volatility affect this butterfly?: ROKU ATM IV is at 45.01% with IV rank near 10.75%, 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.