How are RS 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 RS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.10%), the computed maximum profit is $929.95 per contract and the computed maximum loss is -$887.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RS butterfly?

The breakeven for the RS butterfly priced on this page is roughly $368.88 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 RS market-implied 1-standard-deviation expected move is approximately 7.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RS implied volatility affect this butterfly?

RS ATM IV is at 27.10% with IV rank near 36.07%, 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.

RS Butterfly Strategy

RS (Reliance Steel & Aluminum Co.), in the Basic Materials sector, (Steel industry), listed on NYSE.

Reliance Steel & Aluminum Co. (RS) operates as a premier diversified metal solutions provider and a leading metal service center, serving clients across the United States, Canada, and globally. The company provides an extensive inventory of approximately 100,000 metal products, including alloys, aluminum, brass, copper, carbon steel, stainless steel, titanium, and various specialty steels. Beyond distribution, it offers comprehensive metal processing services to diverse sectors such as general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. Additionally, RS supplies non-ferrous metals and tubular building products, while also manufacturing bespoke extruded metals, fabricated components, and welded parts. As of December 31, 2021, its network comprised about 315 facilities spread across 40 U.S. states and 13 other countries. The company directly sells its offerings to original equipment manufacturers, largely catering to small machine shops and fabricators.

RS (Reliance Steel & Aluminum Co.) trades in the Basic Materials sector, specifically Steel, with a market capitalization of approximately $19.69B, a trailing P/E of 24.71, a beta of 0.96 versus the broader market, a 52-week range of 260.31-419.83, average daily share volume of 330K, a public-listing history dating back to 1994, approximately 16K full-time employees. These structural characteristics shape how RS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.96 places RS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. RS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on RS?

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 RS snapshot

As of June 29, 2026, spot at $376.15, ATM IV 27.10%, IV rank 36.07%, expected move 7.77%. The butterfly on RS 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 18-day expiry.

Why this butterfly structure on RS specifically: RS IV at 27.10% 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 7.77% (roughly $29.22 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RS expiries trade a higher absolute premium for lower per-day decay. Position sizing on RS should anchor to the underlying notional of $376.15 per share and to the trader's directional view on RS stock.

RS butterfly setup

The RS 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 RS near $376.15, the first option leg uses a $360.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RS chain at a 18-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 RS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$360.00	$19.95
Sell 2	Call	$380.00	$7.60
Buy 1	Call	$390.00	$4.13

RS butterfly risk and reward

Net Premium / Debit: -$887.50
Max Profit (per contract): $929.95
Max Loss (per contract): -$887.50
Breakeven(s): $368.88
Risk / Reward Ratio: 1.048

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.

RS butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on RS. 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%	-$887.50
$83.18	-77.9%	-$887.50
$166.35	-55.8%	-$887.50
$249.51	-33.7%	-$887.50
$332.68	-11.6%	-$887.50
$415.85	+10.6%	+$112.50
$499.02	+32.7%	+$112.50
$582.18	+54.8%	+$112.50
$665.35	+76.9%	+$112.50
$748.52	+99.0%	+$112.50

When traders use butterfly on RS

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

RS thesis for this butterfly

The market-implied 1-standard-deviation range for RS extends from approximately $346.93 on the downside to $405.37 on the upside. A RS long call butterfly is a pinning play: it pays maximum at the middle strike if RS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RS IV rank near 36.07% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on RS should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, RS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RS-specific events.

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

Frequently asked questions

What is a butterfly on RS?: A butterfly on RS is the butterfly strategy applied to RS (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 RS stock trading near $376.15, the strikes shown on this page are snapped to the nearest listed RS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RS 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 RS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.10%), the computed maximum profit is $929.95 per contract and the computed maximum loss is -$887.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RS butterfly?: The breakeven for the RS butterfly priced on this page is roughly $368.88 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 RS market-implied 1-standard-deviation expected move is approximately 7.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on RS?: Butterflies on RS are pinning bets - traders use them when they expect RS 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 RS implied volatility affect this butterfly?: RS ATM IV is at 27.10% with IV rank near 36.07%, 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.