How are RYTM 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 RYTM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.00%), the computed maximum profit is $445.02 per contract and the computed maximum loss is -$12.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RYTM butterfly?

The breakeven for the RYTM butterfly priced on this page is roughly $105.09 and $115.22 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 RYTM market-implied 1-standard-deviation expected move is approximately 15.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RYTM implied volatility affect this butterfly?

RYTM ATM IV is at 55.00% with IV rank near 15.91%, 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.

RYTM Butterfly Strategy

RYTM (Rhythm Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Rhythm Pharmaceuticals, Inc. is a biopharmaceutical company with commercial products, dedicated to the discovery, development, and market launch of therapies addressing rare genetic conditions that cause obesity. Its leading pharmaceutical, IMCIVREE, functions as a powerful agonist of the melanocortin-4 receptor (MC4R). This medication is indicated for treating obesity stemming from deficiencies in pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or the leptin receptor (LEPR), alongside its use in patients with Bardet-Biedl and Alström syndromes. Furthermore, the company is progressing setmelanotide (the active compound in IMCIVREE) through Phase II clinical trials. These studies are evaluating its potential for a broader spectrum of applications, including obesity caused by heterozygous POMC or LEPR deficiencies, steroid receptor coactivator 1 (SRC1) deficiency, SH2B1 deficiency, MC4 receptor deficiency, and obesity associated with Smith-Magenis syndrome, POMC epigenetic disorders, and other MC4R-related conditions. Rhythm Pharmaceuticals holds a collaborative research agreement with the Clinical Registry Investigating Bardet-Biedl Syndrome.

RYTM (Rhythm Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $7.53B, a beta of 1.92 versus the broader market, a 52-week range of 62.29-122.2, average daily share volume of 815K, a public-listing history dating back to 2017, approximately 283 full-time employees. These structural characteristics shape how RYTM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.92 indicates RYTM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a butterfly on RYTM?

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 RYTM snapshot

As of June 29, 2026, spot at $108.78, ATM IV 55.00%, IV rank 15.91%, expected move 15.77%. The butterfly on RYTM 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 RYTM specifically: RYTM IV at 55.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a RYTM butterfly, with a market-implied 1-standard-deviation move of approximately 15.77% (roughly $17.15 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 RYTM expiries trade a higher absolute premium for lower per-day decay. Position sizing on RYTM should anchor to the underlying notional of $108.78 per share and to the trader's directional view on RYTM stock.

RYTM butterfly setup

The RYTM 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 RYTM near $108.78, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RYTM 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 RYTM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$105.00	$7.35
Sell 2	Call	$110.00	$5.05
Buy 1	Call	$115.00	$2.88

RYTM butterfly risk and reward

Net Premium / Debit: -$12.50
Max Profit (per contract): $445.02
Max Loss (per contract): -$12.50
Breakeven(s): $105.09, $115.22
Risk / Reward Ratio: 35.601

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.

RYTM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on RYTM. 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%	-$12.50
$24.06	-77.9%	-$12.50
$48.11	-55.8%	-$12.50
$72.16	-33.7%	-$12.50
$96.21	-11.6%	-$12.50
$120.26	+10.6%	-$12.50
$144.31	+32.7%	-$12.50
$168.37	+54.8%	-$12.50
$192.42	+76.9%	-$12.50
$216.47	+99.0%	-$12.50

When traders use butterfly on RYTM

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

RYTM thesis for this butterfly

The market-implied 1-standard-deviation range for RYTM extends from approximately $91.63 on the downside to $125.93 on the upside. A RYTM long call butterfly is a pinning play: it pays maximum at the middle strike if RYTM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RYTM IV rank near 15.91% 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 RYTM at 55.00%. As a Healthcare name, RYTM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RYTM-specific events.

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

Frequently asked questions

What is a butterfly on RYTM?: A butterfly on RYTM is the butterfly strategy applied to RYTM (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 RYTM stock trading near $108.78, the strikes shown on this page are snapped to the nearest listed RYTM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RYTM 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 RYTM butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 55.00%), the computed maximum profit is $445.02 per contract and the computed maximum loss is -$12.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RYTM butterfly?: The breakeven for the RYTM butterfly priced on this page is roughly $105.09 and $115.22 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 RYTM market-implied 1-standard-deviation expected move is approximately 15.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on RYTM?: Butterflies on RYTM are pinning bets - traders use them when they expect RYTM 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 RYTM implied volatility affect this butterfly?: RYTM ATM IV is at 55.00% with IV rank near 15.91%, 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.