How are TOL 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 TOL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.10%), the computed maximum profit is $709.34 per contract and the computed maximum loss is -$257.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TOL butterfly?

The breakeven for the TOL butterfly priced on this page is roughly $157.58 and $172.43 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 TOL market-implied 1-standard-deviation expected move is approximately 9.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TOL implied volatility affect this butterfly?

TOL ATM IV is at 34.10% with IV rank near 21.05%, 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.

TOL Butterfly Strategy

TOL (Toll Brothers, Inc.), in the Consumer Cyclical sector, (Residential Construction industry), listed on NYSE.

Toll Brothers, Inc. (TOL) stands as a prominent luxury homebuilder operating across the United States. The company, along with its various divisions, specializes in the design, construction, marketing, sale, and financing of upscale detached and attached residences within master-planned communities. Its operations are structured into two main divisions: Traditional Home Building and City Living. The latter specifically focuses on developing, constructing, and selling condominiums. Beyond its core homebuilding activities, Toll Brothers diversifies its portfolio by developing and managing golf courses and country clubs, acquiring and divesting land, and constructing, operating, and leasing apartment complexes. It further enhances its offerings by providing a wide array of interior design and finishing selections, encompassing everything from flooring and cabinetry to smart home systems and security features.

TOL (Toll Brothers, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $15.34B, a trailing P/E of 12.12, a beta of 1.37 versus the broader market, a 52-week range of 113.1-168.36, average daily share volume of 1.1M, a public-listing history dating back to 1986, approximately 5K full-time employees. These structural characteristics shape how TOL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.37 indicates TOL has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. TOL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on TOL?

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 TOL snapshot

As of June 30, 2026, spot at $164.50, ATM IV 34.10%, IV rank 21.05%, expected move 9.78%. The butterfly on TOL 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 TOL specifically: TOL IV at 34.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a TOL butterfly, with a market-implied 1-standard-deviation move of approximately 9.78% (roughly $16.08 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 TOL expiries trade a higher absolute premium for lower per-day decay. Position sizing on TOL should anchor to the underlying notional of $164.50 per share and to the trader's directional view on TOL stock.

TOL butterfly setup

The TOL 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 TOL near $164.50, 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 TOL 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 TOL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$155.00	$10.65
Sell 2	Call	$165.00	$4.70
Buy 1	Call	$175.00	$1.33

TOL butterfly risk and reward

Net Premium / Debit: -$257.50
Max Profit (per contract): $709.34
Max Loss (per contract): -$257.50
Breakeven(s): $157.58, $172.43
Risk / Reward Ratio: 2.755

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.

TOL butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on TOL. 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%	-$257.50
$36.38	-77.9%	-$257.50
$72.75	-55.8%	-$257.50
$109.12	-33.7%	-$257.50
$145.49	-11.6%	-$257.50
$181.86	+10.6%	-$257.50
$218.23	+32.7%	-$257.50
$254.61	+54.8%	-$257.50
$290.98	+76.9%	-$257.50
$327.35	+99.0%	-$257.50

When traders use butterfly on TOL

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

TOL thesis for this butterfly

The market-implied 1-standard-deviation range for TOL extends from approximately $148.42 on the downside to $180.58 on the upside. A TOL long call butterfly is a pinning play: it pays maximum at the middle strike if TOL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TOL IV rank near 21.05% 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 TOL at 34.10%. As a Consumer Cyclical name, TOL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TOL-specific events.

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

Frequently asked questions

What is a butterfly on TOL?: A butterfly on TOL is the butterfly strategy applied to TOL (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 TOL stock trading near $164.50, the strikes shown on this page are snapped to the nearest listed TOL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TOL 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 TOL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 34.10%), the computed maximum profit is $709.34 per contract and the computed maximum loss is -$257.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TOL butterfly?: The breakeven for the TOL butterfly priced on this page is roughly $157.58 and $172.43 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 TOL market-implied 1-standard-deviation expected move is approximately 9.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on TOL?: Butterflies on TOL are pinning bets - traders use them when they expect TOL 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 TOL implied volatility affect this butterfly?: TOL ATM IV is at 34.10% with IV rank near 21.05%, 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.