How are TER 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 TER butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 69.34%), the computed maximum profit is $1,314.68 per contract and the computed maximum loss is -$20.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TER butterfly?

The breakeven for the TER butterfly priced on this page is roughly $324.80 and $355.10 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 TER market-implied 1-standard-deviation expected move is approximately 19.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TER implied volatility affect this butterfly?

TER ATM IV is at 69.34% with IV rank near 65.90%, 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.

TER Butterfly Strategy

TER (Teradyne, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.

Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. The company operates through Semiconductor Test, System Test, Industrial Automation, and Wireless Test segments. The Semiconductor Test segment offers products and services for wafer level and device package testing in automotive, industrial, communications, consumer, smartphones, cloud computer and electronic game, and other applications. This segment also provides FLEX test platform systems; J750 test system to address the volume semiconductor devices; Magnum platform that tests memory devices, such as flash memory and DRAM; and ETS platform for semiconductor manufacturers, and assembly and test subcontractors in the analog/mixed signal markets. It serves integrated device manufacturers that integrate the fabrication of silicon wafers into their business; fabless companies that outsource the manufacturing of silicon wafers; foundries; and semiconductor assembly and test providers. The System Test segment offers defense/aerospace test instrumentation and systems; storage test systems; and circuit-board test and inspection systems.

TER (Teradyne, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $56.88B, a trailing P/E of 66.55, a beta of 1.79 versus the broader market, a 52-week range of 75.99-422.11, average daily share volume of 3.5M, a public-listing history dating back to 1970, approximately 7K full-time employees. These structural characteristics shape how TER stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.79 indicates TER 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 66.55 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. TER pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on TER?

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 TER snapshot

As of May 15, 2026, spot at $339.94, ATM IV 69.34%, IV rank 65.90%, expected move 19.88%. The butterfly on TER 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 28-day expiry.

Why this butterfly structure on TER specifically: TER IV at 69.34% 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 19.88% (roughly $67.57 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 TER expiries trade a higher absolute premium for lower per-day decay. Position sizing on TER should anchor to the underlying notional of $339.94 per share and to the trader's directional view on TER stock.

TER butterfly setup

The TER 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 TER near $339.94, the first option leg uses a $325.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TER 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 TER shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$325.00	$34.30
Sell 2	Call	$340.00	$27.10
Buy 1	Call	$355.00	$20.10

TER butterfly risk and reward

Net Premium / Debit: -$20.00
Max Profit (per contract): $1,314.68
Max Loss (per contract): -$20.00
Breakeven(s): $324.80, $355.10
Risk / Reward Ratio: 65.734

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.

TER butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on TER. 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.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$20.00
$75.17	-77.9%	-$20.00
$150.33	-55.8%	-$20.00
$225.49	-33.7%	-$20.00
$300.66	-11.6%	-$20.00
$375.82	+10.6%	-$20.00
$450.98	+32.7%	-$20.00
$526.14	+54.8%	-$20.00
$601.30	+76.9%	-$20.00
$676.46	+99.0%	-$20.00

When traders use butterfly on TER

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

TER thesis for this butterfly

The market-implied 1-standard-deviation range for TER extends from approximately $272.37 on the downside to $407.51 on the upside. A TER long call butterfly is a pinning play: it pays maximum at the middle strike if TER settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TER IV rank near 65.90% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on TER should anchor more to the directional view and the expected-move geometry. As a Technology name, TER options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TER-specific events.

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

Frequently asked questions

What is a butterfly on TER?: A butterfly on TER is the butterfly strategy applied to TER (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 TER stock trading near $339.94, the strikes shown on this page are snapped to the nearest listed TER chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TER 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 TER butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 69.34%), the computed maximum profit is $1,314.68 per contract and the computed maximum loss is -$20.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TER butterfly?: The breakeven for the TER butterfly priced on this page is roughly $324.80 and $355.10 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 TER market-implied 1-standard-deviation expected move is approximately 19.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on TER?: Butterflies on TER are pinning bets - traders use them when they expect TER 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 TER implied volatility affect this butterfly?: TER ATM IV is at 69.34% with IV rank near 65.90%, 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.