How are SMMT 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 SMMT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 95.37%), the computed maximum profit is $90.00 per contract and the computed maximum loss is -$10.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SMMT butterfly?

The breakeven for the SMMT butterfly priced on this page is roughly $14.10 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 SMMT market-implied 1-standard-deviation expected move is approximately 27.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SMMT implied volatility affect this butterfly?

SMMT ATM IV is at 95.37% with IV rank near 37.05%, 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.

SMMT Butterfly Strategy

SMMT (Summit Therapeutics Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Summit Therapeutics Inc. is a biopharmaceutical firm dedicated to discovering, developing, and commercializing therapeutic solutions, primarily targeting infectious diseases across the United States and Latin America. The company's clinical development pipeline is heavily concentrated on therapies for Clostridioides difficile infection (CDI). Its flagship product candidate, ridinilazole, is an orally administered small molecule antibiotic currently advancing through Phase III clinical trials as a treatment for CDI. Beyond its lead asset, Summit Therapeutics is also progressing SMT-738, designed to combat multidrug-resistant infections, notably carbapenem-resistant Enterobacteriaceae (CRE). Additionally, its DDS-04 series represents a potential therapeutic avenue for various infections caused by the Enterobacteriaceae family of bacteria. Established in 2003, the company maintains its headquarters in Cambridge, Massachusetts.

SMMT (Summit Therapeutics Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $10.87B, a beta of -1.31 versus the broader market, a 52-week range of 12.55-30.98, average daily share volume of 5.2M, a public-listing history dating back to 2015, approximately 159 full-time employees. These structural characteristics shape how SMMT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -1.31 indicates SMMT has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a butterfly on SMMT?

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 SMMT snapshot

As of June 30, 2026, spot at $14.51, ATM IV 95.37%, IV rank 37.05%, expected move 27.34%. The butterfly on SMMT 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 SMMT specifically: SMMT IV at 95.37% 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 27.34% (roughly $3.97 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 SMMT expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMMT should anchor to the underlying notional of $14.51 per share and to the trader's directional view on SMMT stock.

SMMT butterfly setup

The SMMT 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 SMMT near $14.51, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMMT 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 SMMT shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$14.00	$2.05
Sell 2	Call	$15.00	$1.95
Buy 1	Call	$15.00	$1.95

SMMT butterfly risk and reward

Net Premium / Debit: -$10.00
Max Profit (per contract): $90.00
Max Loss (per contract): -$10.00
Breakeven(s): $14.10
Risk / Reward Ratio: 9.000

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.

SMMT butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on SMMT. 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	-99.9%	-$10.00
$3.22	-77.8%	-$10.00
$6.42	-55.7%	-$10.00
$9.63	-33.6%	-$10.00
$12.84	-11.5%	-$10.00
$16.05	+10.6%	+$90.00
$19.25	+32.7%	+$90.00
$22.46	+54.8%	+$90.00
$25.67	+76.9%	+$90.00
$28.87	+99.0%	+$90.00

When traders use butterfly on SMMT

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

SMMT thesis for this butterfly

The market-implied 1-standard-deviation range for SMMT extends from approximately $10.54 on the downside to $18.48 on the upside. A SMMT long call butterfly is a pinning play: it pays maximum at the middle strike if SMMT settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SMMT IV rank near 37.05% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on SMMT should anchor more to the directional view and the expected-move geometry. As a Healthcare name, SMMT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMMT-specific events.

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

Frequently asked questions

What is a butterfly on SMMT?: A butterfly on SMMT is the butterfly strategy applied to SMMT (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 SMMT stock trading near $14.51, the strikes shown on this page are snapped to the nearest listed SMMT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are SMMT 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 SMMT butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 95.37%), the computed maximum profit is $90.00 per contract and the computed maximum loss is -$10.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SMMT butterfly?: The breakeven for the SMMT butterfly priced on this page is roughly $14.10 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 SMMT market-implied 1-standard-deviation expected move is approximately 27.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on SMMT?: Butterflies on SMMT are pinning bets - traders use them when they expect SMMT 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 SMMT implied volatility affect this butterfly?: SMMT ATM IV is at 95.37% with IV rank near 37.05%, 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.