How are ROST 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 ROST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.82%), the computed maximum profit is $725.85 per contract and the computed maximum loss is -$215.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ROST butterfly?

The breakeven for the ROST butterfly priced on this page is roughly $202.15 and $217.85 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 ROST market-implied 1-standard-deviation expected move is approximately 8.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ROST implied volatility affect this butterfly?

ROST ATM IV is at 28.82% with IV rank near 55.32%, 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.

ROST Butterfly Strategy

ROST (Ross Stores, Inc.), in the Consumer Cyclical sector, (Apparel - Retail industry), listed on NASDAQ.

Ross Stores, Inc., through its various subsidiaries, manages a chain of off-price retail establishments focusing on apparel and home goods. These stores operate under two main brand names: Ross Dress for Less and dd's DISCOUNTS. Their product selection primarily includes clothing, accessories, footwear, and household decor. The Ross Dress for Less outlets primarily serve middle-income households, offering merchandise at prices considerably lower than traditional department and specialty stores. Conversely, dd's DISCOUNTS stores cater to moderate-income households, providing products at prices below those typically found in department and discount stores. As of July 5, 2022, the company had approximately 1,950 stores operating across 40 states, the District of Columbia, and Guam.

ROST (Ross Stores, Inc.) trades in the Consumer Cyclical sector, specifically Apparel - Retail, with a market capitalization of approximately $68.41B, a trailing P/E of 29.37, a beta of 0.87 versus the broader market, a 52-week range of 126.32-242.81, average daily share volume of 2.8M, a public-listing history dating back to 1985, approximately 107K full-time employees. These structural characteristics shape how ROST stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.87 places ROST roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ROST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ROST?

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 ROST snapshot

As of June 30, 2026, spot at $211.65, ATM IV 28.82%, IV rank 55.32%, expected move 8.26%. The butterfly on ROST 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 31-day expiry.

Why this butterfly structure on ROST specifically: ROST IV at 28.82% 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 8.26% (roughly $17.49 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ROST expiries trade a higher absolute premium for lower per-day decay. Position sizing on ROST should anchor to the underlying notional of $211.65 per share and to the trader's directional view on ROST stock.

ROST butterfly setup

The ROST 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 ROST near $211.65, the first option leg uses a $200.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ROST chain at a 31-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 ROST shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$200.00	$14.95
Sell 2	Call	$210.00	$8.45
Buy 1	Call	$220.00	$4.10

ROST butterfly risk and reward

Net Premium / Debit: -$215.00
Max Profit (per contract): $725.85
Max Loss (per contract): -$215.00
Breakeven(s): $202.15, $217.85
Risk / Reward Ratio: 3.376

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.

ROST butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ROST. 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%	-$215.00
$46.81	-77.9%	-$215.00
$93.60	-55.8%	-$215.00
$140.40	-33.7%	-$215.00
$187.19	-11.6%	-$215.00
$233.99	+10.6%	-$215.00
$280.79	+32.7%	-$215.00
$327.58	+54.8%	-$215.00
$374.38	+76.9%	-$215.00
$421.17	+99.0%	-$215.00

When traders use butterfly on ROST

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

ROST thesis for this butterfly

The market-implied 1-standard-deviation range for ROST extends from approximately $194.16 on the downside to $229.14 on the upside. A ROST long call butterfly is a pinning play: it pays maximum at the middle strike if ROST settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ROST IV rank near 55.32% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on ROST should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, ROST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ROST-specific events.

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

Frequently asked questions

What is a butterfly on ROST?: A butterfly on ROST is the butterfly strategy applied to ROST (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 ROST stock trading near $211.65, the strikes shown on this page are snapped to the nearest listed ROST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ROST 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 ROST butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.82%), the computed maximum profit is $725.85 per contract and the computed maximum loss is -$215.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ROST butterfly?: The breakeven for the ROST butterfly priced on this page is roughly $202.15 and $217.85 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 ROST market-implied 1-standard-deviation expected move is approximately 8.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ROST?: Butterflies on ROST are pinning bets - traders use them when they expect ROST 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 ROST implied volatility affect this butterfly?: ROST ATM IV is at 28.82% with IV rank near 55.32%, 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.