How are SITM 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 SITM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 73.10%), the computed maximum profit is $3,334.46 per contract and the computed maximum loss is -$360.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SITM butterfly?

The breakeven for the SITM butterfly priced on this page is roughly $673.60 and $746.40 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The SITM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 20.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SITM implied volatility affect this butterfly?

SITM ATM IV is at 73.10% with IV rank near 25.32%, 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.

SITM Butterfly Strategy

SITM (SiTime Corporation), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

SiTime Corporation is a company that focuses on the development, manufacturing, and worldwide distribution of advanced silicon-based timing solutions. Their operations span key regions such as Taiwan, Hong Kong, and the United States, in addition to broader international markets. The company's core offerings include a comprehensive range of timing components like resonators, clock integrated circuits (ICs), and diverse types of oscillators. These precision timing products are crucial for a wide array of sectors, finding applications in communications and enterprise infrastructure, automotive systems, industrial environments, the Internet of Things (IoT), mobile technology, consumer electronics, and even aerospace and defense. SiTime commercializes its timing product portfolio through an extensive network of channel partners, including both distributors and resellers. The corporation was founded in 2003 and is presently headquartered in Santa Clara, California.

SITM (SiTime Corporation) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $17.96B, a trailing P/E of 1,277.39, a beta of 2.87 versus the broader market, a 52-week range of 204.605-901.81, average daily share volume of 540K, a public-listing history dating back to 2019, approximately 441 full-time employees. These structural characteristics shape how SITM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.87 indicates SITM 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 1,277.39 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 SITM?

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.

SITM snapshot

As of August 14, 2026, spot at $710.51, ATM IV 73.10%, IV rank 25.32%, expected move 20.96%. The butterfly on SITM below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this butterfly structure on SITM specifically: SITM IV at 73.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a SITM butterfly, with a market-implied 1-standard-deviation move of approximately 20.96% (roughly $148.90 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SITM expiries trade a higher absolute premium for lower per-day decay. Position sizing on SITM should anchor to the underlying notional of $710.51 per share and to the trader's directional view on SITM stock.

SITM butterfly setup

The SITM butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With SITM at $710.51 on that close, the first option leg uses a $670.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SITM chain at a 35-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 SITM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$670.00	$86.80
Sell 2	Call	$710.00	$66.20
Buy 1	Call	$750.00	$49.20

SITM butterfly risk and reward

Net Premium / Debit: -$360.00
Max Profit (per contract): $3,334.46
Max Loss (per contract): -$360.00
Breakeven(s): $673.60, $746.40
Risk / Reward Ratio: 9.262

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.

SITM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on SITM. 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%	-$360.00
$157.11	-77.9%	-$360.00
$314.20	-55.8%	-$360.00
$471.30	-33.7%	-$360.00
$628.40	-11.6%	-$360.00
$785.49	+10.6%	-$360.00
$942.59	+32.7%	-$360.00
$1,099.69	+54.8%	-$360.00
$1,256.78	+76.9%	-$360.00
$1,413.88	+99.0%	-$360.00

When traders use butterfly on SITM

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

SITM thesis for this butterfly

The market-implied 1-standard-deviation range for SITM extends from approximately $561.61 on the downside to $859.41 on the upside. A SITM long call butterfly is a pinning play: it pays maximum at the middle strike if SITM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SITM IV rank near 25.32% 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 SITM at 73.10%. As a Technology name, SITM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SITM-specific events.

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

Frequently asked questions

What is a butterfly on SITM?: A butterfly on SITM is the butterfly strategy applied to SITM (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 SITM stock at $710.51 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed SITM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are SITM 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 SITM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 73.10%), the computed maximum profit is $3,334.46 per contract and the computed maximum loss is -$360.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SITM butterfly?: The breakeven for the SITM butterfly priced on this page is roughly $673.60 and $746.40 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The SITM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 20.96%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on SITM?: Butterflies on SITM are pinning bets - traders use them when they expect SITM 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 SITM implied volatility affect this butterfly?: SITM ATM IV is at 73.10% with IV rank near 25.32%, 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.