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 41.90%), the computed maximum profit is $595.41 per contract and the computed maximum loss is -$390.00 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 $131.10 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 TOL market-implied 1-standard-deviation expected move is approximately 12.01%; 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 41.90% with IV rank near 51.69%, 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.

TOL Butterfly Strategy

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

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and City Living. It also designs, builds, markets, and sells condominiums through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, it owns and operates architectural, engineering, mortgage, title, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers.

TOL (Toll Brothers, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $12.58B, a trailing P/E of 9.22, a beta of 1.39 versus the broader market, a 52-week range of 100.92-168.36, average daily share volume of 1.2M, 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 1.39 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. The trailing P/E of 9.22 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. 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 May 15, 2026, spot at $126.76, ATM IV 41.90%, IV rank 51.69%, expected move 12.01%. 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 34-day expiry.

Why this butterfly structure on TOL specifically: TOL IV at 41.90% 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 12.01% (roughly $15.23 on the underlying). The 34-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 $126.76 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 $126.76, the first option leg uses a $120.00 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 34-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	$120.00	$10.85
Sell 2	Call	$125.00	$7.70
Buy 1	Call	$135.00	$3.45

TOL butterfly risk and reward

Net Premium / Debit: +$110.00
Max Profit (per contract): $595.41
Max Loss (per contract): -$390.00
Breakeven(s): $131.10
Risk / Reward Ratio: 1.527

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.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	+$110.00
$28.04	-77.9%	+$110.00
$56.06	-55.8%	+$110.00
$84.09	-33.7%	+$110.00
$112.11	-11.6%	+$110.00
$140.14	+10.6%	-$390.00
$168.17	+32.7%	-$390.00
$196.19	+54.8%	-$390.00
$224.22	+76.9%	-$390.00
$252.25	+99.0%	-$390.00

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 $111.53 on the downside to $141.99 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 51.69% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on TOL should anchor more to the directional view and the expected-move geometry. 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 $126.76, 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 41.90%), the computed maximum profit is $595.41 per contract and the computed maximum loss is -$390.00 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 $131.10 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 TOL market-implied 1-standard-deviation expected move is approximately 12.01%; 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 41.90% with IV rank near 51.69%, 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.