How are SMTC 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 SMTC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 94.40%), the computed maximum profit is $685.17 per contract and the computed maximum loss is -$295.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SMTC butterfly?

The breakeven for the SMTC butterfly priced on this page is roughly $157.95 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 SMTC market-implied 1-standard-deviation expected move is approximately 27.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SMTC implied volatility affect this butterfly?

SMTC ATM IV is at 94.40% with IV rank near 47.95%, 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.

SMTC Butterfly Strategy

SMTC (Semtech Corporation), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Semtech Corporation is a technology firm specializing in the creation, production, and global distribution of advanced analog and mixed-signal semiconductor components, complemented by sophisticated algorithms. The company's extensive product portfolio begins with signal integrity solutions. These encompass crucial optical data communication and video transport products utilized in various infrastructure and industrial environments. It also provides integrated circuits specifically engineered for data centers, corporate networks, passive optical networks, wireless base station optical transceivers, and high-speed interface applications. Furthermore, Semtech develops video technologies for broadcast purposes and professional audio-visual (AV) needs, including innovative video-over-IP technology. Another significant offering involves protection products, which integrate filter and termination devices with transient voltage suppressors.

SMTC (Semtech Corporation) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $13.95B, a beta of 2.32 versus the broader market, a 52-week range of 42.38-177.35, average daily share volume of 3.5M, a public-listing history dating back to 1980, approximately 2K full-time employees. These structural characteristics shape how SMTC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.32 indicates SMTC 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 SMTC?

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 SMTC snapshot

As of June 30, 2026, spot at $162.74, ATM IV 94.40%, IV rank 47.95%, expected move 27.06%. The butterfly on SMTC 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 17-day expiry.

Why this butterfly structure on SMTC specifically: SMTC IV at 94.40% 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 27.06% (roughly $44.04 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SMTC expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMTC should anchor to the underlying notional of $162.74 per share and to the trader's directional view on SMTC stock.

SMTC butterfly setup

The SMTC 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 SMTC near $162.74, the first option leg uses a $155.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMTC chain at a 17-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 SMTC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$155.00	$17.75
Sell 2	Call	$165.00	$12.70
Buy 1	Call	$170.00	$10.60

SMTC butterfly risk and reward

Net Premium / Debit: -$295.00
Max Profit (per contract): $685.17
Max Loss (per contract): -$295.00
Breakeven(s): $157.95
Risk / Reward Ratio: 2.323

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.

SMTC butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on SMTC. 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%	-$295.00
$35.99	-77.9%	-$295.00
$71.97	-55.8%	-$295.00
$107.95	-33.7%	-$295.00
$143.94	-11.6%	-$295.00
$179.92	+10.6%	+$205.00
$215.90	+32.7%	+$205.00
$251.88	+54.8%	+$205.00
$287.86	+76.9%	+$205.00
$323.84	+99.0%	+$205.00

When traders use butterfly on SMTC

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

SMTC thesis for this butterfly

The market-implied 1-standard-deviation range for SMTC extends from approximately $118.70 on the downside to $206.78 on the upside. A SMTC long call butterfly is a pinning play: it pays maximum at the middle strike if SMTC settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SMTC IV rank near 47.95% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on SMTC should anchor more to the directional view and the expected-move geometry. As a Technology name, SMTC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMTC-specific events.

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

Frequently asked questions

What is a butterfly on SMTC?: A butterfly on SMTC is the butterfly strategy applied to SMTC (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 SMTC stock trading near $162.74, the strikes shown on this page are snapped to the nearest listed SMTC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are SMTC 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 SMTC butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 94.40%), the computed maximum profit is $685.17 per contract and the computed maximum loss is -$295.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SMTC butterfly?: The breakeven for the SMTC butterfly priced on this page is roughly $157.95 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 SMTC market-implied 1-standard-deviation expected move is approximately 27.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on SMTC?: Butterflies on SMTC are pinning bets - traders use them when they expect SMTC 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 SMTC implied volatility affect this butterfly?: SMTC ATM IV is at 94.40% with IV rank near 47.95%, 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.