How are VLO 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 VLO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 39.57%), the computed maximum profit is $1,418.37 per contract and the computed maximum loss is -$550.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a VLO butterfly?

The breakeven for the VLO butterfly priced on this page is roughly $324.23 and $354.50 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The VLO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current VLO implied volatility affect this butterfly?

VLO ATM IV is at 39.57% with IV rank near 53.49%, 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.

VLO Butterfly Strategy

VLO (Valero Energy Corporation), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.

Valero Energy Corporation functions as a global producer and marketer of transportation fuels and petrochemicals, with operations spanning the United States, Canada, the United Kingdom, Ireland, and other international territories. The company organizes its business across three primary divisions: Refining, Renewable Diesel, and Ethanol. Its Refining segment generates a wide array of products, including various types of gasoline (conventional, premium, reformulated, and California Air Resources Board-compliant), diverse diesel fuels (low-sulfur, ultra-low-sulfur, and CARB diesel), jet fuels, blendstocks, asphalts, petrochemicals, and lubricants. This division also handles the sale of lube oils and natural gas liquids. As of the end of 2021, Valero managed 15 petroleum refineries, boasting a combined daily processing capacity of approximately 3.2 million barrels of crude oil. The Ethanol division comprises 12 plants, capable of producing around 1.6 billion gallons of ethanol annually.

VLO (Valero Energy Corporation) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $98.38B, a trailing P/E of 13.93, a beta of 0.55 versus the broader market, a 52-week range of 135.02-346.09, average daily share volume of 3.0M, a public-listing history dating back to 1982, approximately 10K full-time employees. These structural characteristics shape how VLO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.55 indicates VLO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. VLO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on VLO?

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.

VLO snapshot

As of August 14, 2026, spot at $342.03, ATM IV 39.57%, IV rank 53.49%, expected move 11.34%. The butterfly on VLO below is built from the August 14, 2026 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 VLO specifically: VLO IV at 39.57% 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 11.34% (roughly $38.80 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 VLO expiries trade a higher absolute premium for lower per-day decay. Position sizing on VLO should anchor to the underlying notional of $342.03 per share and to the trader's directional view on VLO stock.

VLO butterfly setup

The VLO butterfly below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With VLO at $342.03 on that close, 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 VLO 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 VLO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$325.00	$24.95
Sell 2	Call	$340.00	$16.25
Buy 1	Call	$360.00	$8.05

VLO butterfly risk and reward

Net Premium / Debit: -$50.00
Max Profit (per contract): $1,418.37
Max Loss (per contract): -$550.00
Breakeven(s): $324.23, $354.50
Risk / Reward Ratio: 2.579

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.

VLO butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on VLO. 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%	-$50.00
$75.63	-77.9%	-$50.00
$151.26	-55.8%	-$50.00
$226.88	-33.7%	-$50.00
$302.50	-11.6%	-$50.00
$378.13	+10.6%	-$550.00
$453.75	+32.7%	-$550.00
$529.38	+54.8%	-$550.00
$605.00	+76.9%	-$550.00
$680.62	+99.0%	-$550.00

When traders use butterfly on VLO

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

VLO thesis for this butterfly

The market-implied 1-standard-deviation range for VLO extends from approximately $303.23 on the downside to $380.83 on the upside. A VLO long call butterfly is a pinning play: it pays maximum at the middle strike if VLO settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current VLO IV rank near 53.49% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on VLO should anchor more to the directional view and the expected-move geometry. As a Energy name, VLO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VLO-specific events.

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

Frequently asked questions

What is a butterfly on VLO?: A butterfly on VLO is the butterfly strategy applied to VLO (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 VLO stock at $342.03 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed VLO chain strike and the premiums come straight from that session's bid/ask midpoint.
How are VLO 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 VLO butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 39.57%), the computed maximum profit is $1,418.37 per contract and the computed maximum loss is -$550.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a VLO butterfly?: The breakeven for the VLO butterfly priced on this page is roughly $324.23 and $354.50 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The VLO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.34%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on VLO?: Butterflies on VLO are pinning bets - traders use them when they expect VLO 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 VLO implied volatility affect this butterfly?: VLO ATM IV is at 39.57% with IV rank near 53.49%, 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.