How are SWBI 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 SWBI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.40%), the computed maximum profit is $40.00 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SWBI butterfly?

The breakeven for the SWBI butterfly priced on this page is roughly $15.40 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 SWBI market-implied 1-standard-deviation expected move is approximately 9.86%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SWBI implied volatility affect this butterfly?

SWBI ATM IV is at 34.40% with IV rank near 11.47%, 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.

SWBI Butterfly Strategy

SWBI (Smith & Wesson Brands, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.

Smith & Wesson Brands, Inc. (SWBI) is a leading global enterprise engaged in the design, production, and worldwide sale of firearms. Their extensive product range features various handguns, including revolvers and semi-automatic pistols, along with long guns such as contemporary sporting rifles and bolt-action models. The company also offers related accessories like restraints (handcuffs) and sound suppressors, primarily under its well-known Smith & Wesson, M&P, and Gemtech labels. Beyond its core firearm manufacturing, SWBI provides a suite of specialized industrial services to other businesses. These capabilities encompass precision processes like forging, heat treating, rapid prototyping, tool fabrication, various finishing techniques, electroplating, advanced machining, and custom plastic injection molding. These services are delivered under the Smith & Wesson and Smith & Wesson Precision Components brand names.

SWBI (Smith & Wesson Brands, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $681.2M, a trailing P/E of 36.70, a beta of 0.86 versus the broader market, a 52-week range of 7.73-17.56, average daily share volume of 694K, a public-listing history dating back to 1999, approximately 2K full-time employees. These structural characteristics shape how SWBI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.86 places SWBI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 36.70 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. SWBI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on SWBI?

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 SWBI snapshot

As of June 29, 2026, spot at $15.34, ATM IV 34.40%, IV rank 11.47%, expected move 9.86%. The butterfly on SWBI 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 SWBI specifically: SWBI IV at 34.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a SWBI butterfly, with a market-implied 1-standard-deviation move of approximately 9.86% (roughly $1.51 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 SWBI expiries trade a higher absolute premium for lower per-day decay. Position sizing on SWBI should anchor to the underlying notional of $15.34 per share and to the trader's directional view on SWBI stock.

SWBI butterfly setup

The SWBI 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 SWBI near $15.34, the first option leg uses a $15.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SWBI 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 SWBI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$15.00	$0.60
Sell 2	Call	$15.00	$0.60
Buy 1	Call	$16.00	$0.20

SWBI butterfly risk and reward

Net Premium / Debit: +$40.00
Max Profit (per contract): $40.00
Max Loss (per contract): -$60.00
Breakeven(s): $15.40
Risk / Reward Ratio: 0.667

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.

SWBI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on SWBI. 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%	+$40.00
$3.40	-77.8%	+$40.00
$6.79	-55.7%	+$40.00
$10.18	-33.6%	+$40.00
$13.57	-11.5%	+$40.00
$16.96	+10.6%	-$60.00
$20.35	+32.7%	-$60.00
$23.74	+54.8%	-$60.00
$27.14	+76.9%	-$60.00
$30.53	+99.0%	-$60.00

When traders use butterfly on SWBI

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

SWBI thesis for this butterfly

The market-implied 1-standard-deviation range for SWBI extends from approximately $13.83 on the downside to $16.85 on the upside. A SWBI long call butterfly is a pinning play: it pays maximum at the middle strike if SWBI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current SWBI IV rank near 11.47% 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 SWBI at 34.40%. As a Industrials name, SWBI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SWBI-specific events.

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

Frequently asked questions

What is a butterfly on SWBI?: A butterfly on SWBI is the butterfly strategy applied to SWBI (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 SWBI stock trading near $15.34, the strikes shown on this page are snapped to the nearest listed SWBI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are SWBI 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 SWBI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.40%), the computed maximum profit is $40.00 per contract and the computed maximum loss is -$60.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SWBI butterfly?: The breakeven for the SWBI butterfly priced on this page is roughly $15.40 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 SWBI market-implied 1-standard-deviation expected move is approximately 9.86%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on SWBI?: Butterflies on SWBI are pinning bets - traders use them when they expect SWBI 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 SWBI implied volatility affect this butterfly?: SWBI ATM IV is at 34.40% with IV rank near 11.47%, 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.