How are VMI 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 VMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $1,774.84 per contract and the computed maximum loss is -$1,095.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a VMI butterfly?

The breakeven for the VMI butterfly priced on this page is roughly $490.95 and $529.07 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 VMI market-implied 1-standard-deviation expected move is approximately 9.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current VMI implied volatility affect this butterfly?

VMI ATM IV is at 31.60% with IV rank near 32.98%, 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.

VMI Butterfly Strategy

VMI (Valmont Industries, Inc.), in the Industrials sector, (Conglomerates industry), listed on NYSE.

Valmont Industries, Inc. produces and sells fabricated metal products in the United States, Australia, Brazil, Denmark, and internationally. It operates through two segments: Infrastructure and Agriculture. The company manufactures and distributes engineered metal, steel, wood, aluminum, and composite poles, towers, and components for lighting, traffic, and wireless communication markets; engineered access systems; integrated structure solutions for smart cities; and highway safety products. It also offers engineered steel and concrete pole structures for utility transmission, distribution, substations, and renewable energy generation equipment; and inspection services. In addition, the company provides hot-dipped galvanizing, anodizing, and powder coating services to preserve and protect metal products; and water management solutions and technology for precision agriculture. Further, it manufactures and distributes mechanical irrigation equipment, and related parts and services under the Valley brand name for the agricultural industry; and tubular products for industrial customers.

VMI (Valmont Industries, Inc.) trades in the Industrials sector, specifically Conglomerates, with a market capitalization of approximately $9.97B, a trailing P/E of 29.01, a beta of 1.36 versus the broader market, a 52-week range of 305.07-528.49, average daily share volume of 208K, a public-listing history dating back to 1990, approximately 11K full-time employees. These structural characteristics shape how VMI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.36 indicates VMI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. VMI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on VMI?

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 VMI snapshot

As of May 15, 2026, spot at $506.15, ATM IV 31.60%, IV rank 32.98%, expected move 9.06%. The butterfly on VMI 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 VMI specifically: VMI IV at 31.60% 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 9.06% (roughly $45.85 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 VMI expiries trade a higher absolute premium for lower per-day decay. Position sizing on VMI should anchor to the underlying notional of $506.15 per share and to the trader's directional view on VMI stock.

VMI butterfly setup

The VMI 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 VMI near $506.15, the first option leg uses a $480.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VMI 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 VMI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$480.00	$37.15
Sell 2	Call	$510.00	$18.55
Buy 1	Call	$530.00	$10.90

VMI butterfly risk and reward

Net Premium / Debit: -$1,095.00
Max Profit (per contract): $1,774.84
Max Loss (per contract): -$1,095.00
Breakeven(s): $490.95, $529.07
Risk / Reward Ratio: 1.621

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.

VMI butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on VMI. 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%	-$1,095.00
$111.92	-77.9%	-$1,095.00
$223.83	-55.8%	-$1,095.00
$335.74	-33.7%	-$1,095.00
$447.66	-11.6%	-$1,095.00
$559.57	+10.6%	-$95.00
$671.48	+32.7%	-$95.00
$783.39	+54.8%	-$95.00
$895.30	+76.9%	-$95.00
$1,007.21	+99.0%	-$95.00

When traders use butterfly on VMI

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

VMI thesis for this butterfly

The market-implied 1-standard-deviation range for VMI extends from approximately $460.30 on the downside to $552.00 on the upside. A VMI long call butterfly is a pinning play: it pays maximum at the middle strike if VMI settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current VMI IV rank near 32.98% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on VMI should anchor more to the directional view and the expected-move geometry. As a Industrials name, VMI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VMI-specific events.

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

Frequently asked questions

What is a butterfly on VMI?: A butterfly on VMI is the butterfly strategy applied to VMI (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 VMI stock trading near $506.15, the strikes shown on this page are snapped to the nearest listed VMI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are VMI 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 VMI butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $1,774.84 per contract and the computed maximum loss is -$1,095.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a VMI butterfly?: The breakeven for the VMI butterfly priced on this page is roughly $490.95 and $529.07 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 VMI market-implied 1-standard-deviation expected move is approximately 9.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on VMI?: Butterflies on VMI are pinning bets - traders use them when they expect VMI 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 VMI implied volatility affect this butterfly?: VMI ATM IV is at 31.60% with IV rank near 32.98%, 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.