How are TPB 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 TPB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 49.20%), the computed maximum profit is $446.46 per contract and the computed maximum loss is -$45.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TPB butterfly?

The breakeven for the TPB butterfly priced on this page is roughly $85.38 and $94.55 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 TPB market-implied 1-standard-deviation expected move is approximately 14.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TPB implied volatility affect this butterfly?

TPB ATM IV is at 49.20% with IV rank near 28.74%, 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.

TPB Butterfly Strategy

TPB (Turning Point Brands, Inc.), in the Consumer Defensive sector, (Tobacco industry), listed on NYSE.

Turning Point Brands, Inc., together with its subsidiaries, manufactures, markets, and distributes branded consumer products. The company operates through three segments: Zig-Zag Products, Stoker's Products, and NewGen Products. The Zig-Zag Products segment markets and distributes rolling papers, tubes, finished cigars, make-your-own cigar wraps, and related products under the Zig-Zag brand. The Stoker's Products segment manufactures and markets moist snuff tobacco and loose-leaf chewing tobacco products under the Stoker's, Beech-Nut, Durango, Trophy, and Wind River brands. The NewGen Products segment markets and distributes cannabidiol isolate, liquid vapor products, and other products without tobacco and/or nicotine to individual consumers through VaporFi B2C online platform, as well as non-traditional retail through VaporBeast. It sells its products to wholesale distributors and retail merchants in the independent and chain convenience stores, tobacco outlets, food stores, mass merchandising, and drug stores.

TPB (Turning Point Brands, Inc.) trades in the Consumer Defensive sector, specifically Tobacco, with a market capitalization of approximately $1.74B, a trailing P/E of 31.12, a beta of 0.93 versus the broader market, a 52-week range of 65.8-146.9, average daily share volume of 506K, a public-listing history dating back to 2016, approximately 310 full-time employees. These structural characteristics shape how TPB stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.93 places TPB roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TPB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on TPB?

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 TPB snapshot

As of May 15, 2026, spot at $89.63, ATM IV 49.20%, IV rank 28.74%, expected move 14.11%. The butterfly on TPB 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 63-day expiry.

Why this butterfly structure on TPB specifically: TPB IV at 49.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a TPB butterfly, with a market-implied 1-standard-deviation move of approximately 14.11% (roughly $12.64 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TPB expiries trade a higher absolute premium for lower per-day decay. Position sizing on TPB should anchor to the underlying notional of $89.63 per share and to the trader's directional view on TPB stock.

TPB butterfly setup

The TPB 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 TPB near $89.63, the first option leg uses a $85.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TPB chain at a 63-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 TPB shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$85.00	$10.35
Sell 2	Call	$90.00	$7.70
Buy 1	Call	$95.00	$5.50

TPB butterfly risk and reward

Net Premium / Debit: -$45.00
Max Profit (per contract): $446.46
Max Loss (per contract): -$45.00
Breakeven(s): $85.38, $94.55
Risk / Reward Ratio: 9.921

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.

TPB butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on TPB. 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%	-$45.00
$19.83	-77.9%	-$45.00
$39.64	-55.8%	-$45.00
$59.46	-33.7%	-$45.00
$79.28	-11.6%	-$45.00
$99.09	+10.6%	-$45.00
$118.91	+32.7%	-$45.00
$138.73	+54.8%	-$45.00
$158.54	+76.9%	-$45.00
$178.36	+99.0%	-$45.00

When traders use butterfly on TPB

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

TPB thesis for this butterfly

The market-implied 1-standard-deviation range for TPB extends from approximately $76.99 on the downside to $102.27 on the upside. A TPB long call butterfly is a pinning play: it pays maximum at the middle strike if TPB settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TPB IV rank near 28.74% 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 TPB at 49.20%. As a Consumer Defensive name, TPB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TPB-specific events.

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

Frequently asked questions

What is a butterfly on TPB?: A butterfly on TPB is the butterfly strategy applied to TPB (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 TPB stock trading near $89.63, the strikes shown on this page are snapped to the nearest listed TPB chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TPB 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 TPB butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 49.20%), the computed maximum profit is $446.46 per contract and the computed maximum loss is -$45.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TPB butterfly?: The breakeven for the TPB butterfly priced on this page is roughly $85.38 and $94.55 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 TPB market-implied 1-standard-deviation expected move is approximately 14.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on TPB?: Butterflies on TPB are pinning bets - traders use them when they expect TPB 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 TPB implied volatility affect this butterfly?: TPB ATM IV is at 49.20% with IV rank near 28.74%, 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.