How are SOUN 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 SOUN butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 67.07%), the computed maximum profit is $33.74 per contract and the computed maximum loss is -$14.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SOUN butterfly?

The breakeven for the SOUN butterfly priced on this page is roughly $7.15 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 SOUN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 19.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SOUN implied volatility affect this butterfly?

SOUN ATM IV is at 67.07% with IV rank near 5.68%, 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.

SOUN Butterfly Strategy

SOUN (SoundHound AI, Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.

SoundHound AI, Inc. (SOUN) creates and provides its own artificial intelligence platform, exclusively focused on voice technology. This technology empowers companies across a wide range of industries to offer sophisticated and engaging conversational experiences to their clientele. Its primary offering, the Houndify platform, furnishes a comprehensive toolkit designed to assist brands in developing tailored voice assistants. These capabilities encompass automatic speech recognition (ASR), natural language understanding (NLU), custom wake words, domain-specific applications, text-to-speech (TTS) synthesis, and embedded voice solutions for integration into various products. The company's operations are centered at its headquarters in Santa Clara, California.

SOUN (SoundHound AI, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $3.24B, a beta of 2.83 versus the broader market, a 52-week range of 5.65-22.17, average daily share volume of 30.8M, a public-listing history dating back to 2022, approximately 954 full-time employees. These structural characteristics shape how SOUN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.83 indicates SOUN 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 SOUN?

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.

SOUN snapshot

As of August 14, 2026, spot at $7.44, ATM IV 67.07%, IV rank 5.68%, expected move 19.23%. The butterfly on SOUN 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 28-day expiry.

Why this butterfly structure on SOUN specifically: SOUN IV at 67.07% is on the cheap side of its 1-year range, which favors premium-buying structures like a SOUN butterfly, with a market-implied 1-standard-deviation move of approximately 19.23% (roughly $1.43 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SOUN expiries trade a higher absolute premium for lower per-day decay. Position sizing on SOUN should anchor to the underlying notional of $7.44 per share and to the trader's directional view on SOUN stock.

SOUN butterfly setup

The SOUN 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 SOUN at $7.44 on that close, the first option leg uses a $7.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SOUN chain at a 28-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 SOUN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$7.00	$0.82
Sell 2	Call	$7.50	$0.50
Buy 1	Call	$8.00	$0.33

SOUN butterfly risk and reward

Net Premium / Debit: -$14.50
Max Profit (per contract): $33.74
Max Loss (per contract): -$14.50
Breakeven(s): $7.15
Risk / Reward Ratio: 2.327

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.

SOUN butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on SOUN. 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%	-$14.50
$1.65	-77.8%	-$14.50
$3.30	-55.7%	-$14.50
$4.94	-33.6%	-$14.50
$6.59	-11.5%	-$14.50
$8.23	+10.6%	-$14.50
$9.87	+32.7%	-$14.50
$11.52	+54.8%	-$14.50
$13.16	+76.9%	-$14.50
$14.81	+99.0%	-$14.50

When traders use butterfly on SOUN

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

SOUN thesis for this butterfly

The market-implied 1-standard-deviation range for SOUN extends from approximately $6.01 on the downside to $8.87 on the upside. A SOUN long call butterfly is a pinning play: it pays maximum at the middle strike if SOUN settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SOUN IV rank near 5.68% 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 SOUN at 67.07%. As a Technology name, SOUN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SOUN-specific events.

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

Frequently asked questions

What is a butterfly on SOUN?: A butterfly on SOUN is the butterfly strategy applied to SOUN (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 SOUN stock at $7.44 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed SOUN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are SOUN 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 SOUN butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 67.07%), the computed maximum profit is $33.74 per contract and the computed maximum loss is -$14.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SOUN butterfly?: The breakeven for the SOUN butterfly priced on this page is roughly $7.15 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 SOUN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 19.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on SOUN?: Butterflies on SOUN are pinning bets - traders use them when they expect SOUN 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 SOUN implied volatility affect this butterfly?: SOUN ATM IV is at 67.07% with IV rank near 5.68%, 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.