How are WM 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 WM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 19.90%), the computed maximum profit is $865.39 per contract and the computed maximum loss is -$1,042.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a WM butterfly?

The breakeven for the WM butterfly priced on this page is roughly $210.43 and $229.58 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 WM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current WM implied volatility affect this butterfly?

WM ATM IV is at 19.90% with IV rank near 19.20%, 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.

WM Butterfly Strategy

WM (Waste Management, Inc.), in the Industrials sector, (Waste Management industry), listed on NYSE.

Waste Management, Inc. (WM) functions as a premier provider of environmental waste solutions across North America, serving a diverse client base that includes residential, commercial, industrial, and municipal customers. The company's core operations involve comprehensive collection services, which include gathering and transporting both waste materials and recyclables from their initial point of generation to designated transfer stations, material recovery facilities (MRFs), or final disposal sites. Waste Management maintains an extensive network of facilities, owning, developing, and operating landfill gas-to-energy plants within the United States, in addition to managing numerous transfer stations. As of December 31, 2021, its substantial infrastructure consisted of 255 solid waste landfills, 5 secure hazardous waste landfills, 96 material recovery facilities, and 340 transfer stations. Beyond primary collection and disposal, WM offers services in materials processing and commodities recycling. This extends to recycling brokerage, where they handle the marketing of recyclable goods for third-party entities, alongside providing various other strategic business solutions.

WM (Waste Management, Inc.) trades in the Industrials sector, specifically Waste Management, with a market capitalization of approximately $90.46B, a trailing P/E of 31.91, a beta of 0.45 versus the broader market, a 52-week range of 194.11-248.13, average daily share volume of 2.1M, a public-listing history dating back to 1988, approximately 61K full-time employees. These structural characteristics shape how WM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.45 indicates WM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. WM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on WM?

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.

WM snapshot

As of August 14, 2026, spot at $224.72, ATM IV 19.90%, IV rank 19.20%, expected move 5.71%. The butterfly on WM 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 35-day expiry.

Why this butterfly structure on WM specifically: WM IV at 19.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a WM butterfly, with a market-implied 1-standard-deviation move of approximately 5.71% (roughly $12.82 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated WM expiries trade a higher absolute premium for lower per-day decay. Position sizing on WM should anchor to the underlying notional of $224.72 per share and to the trader's directional view on WM stock.

WM butterfly setup

The WM 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 WM at $224.72 on that close, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WM chain at a 35-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 WM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$210.00	$16.60
Sell 2	Call	$220.00	$8.55
Buy 1	Call	$240.00	$0.93

WM butterfly risk and reward

Net Premium / Debit: -$42.50
Max Profit (per contract): $865.39
Max Loss (per contract): -$1,042.50
Breakeven(s): $210.43, $229.58
Risk / Reward Ratio: 0.830

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.

WM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on WM. 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%	-$42.50
$49.70	-77.9%	-$42.50
$99.38	-55.8%	-$42.50
$149.07	-33.7%	-$42.50
$198.75	-11.6%	-$42.50
$248.44	+10.6%	-$1,042.50
$298.12	+32.7%	-$1,042.50
$347.81	+54.8%	-$1,042.50
$397.50	+76.9%	-$1,042.50
$447.18	+99.0%	-$1,042.50

When traders use butterfly on WM

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

WM thesis for this butterfly

The market-implied 1-standard-deviation range for WM extends from approximately $211.90 on the downside to $237.54 on the upside. A WM long call butterfly is a pinning play: it pays maximum at the middle strike if WM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current WM IV rank near 19.20% 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 WM at 19.90%. As a Industrials name, WM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WM-specific events.

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

Frequently asked questions

What is a butterfly on WM?: A butterfly on WM is the butterfly strategy applied to WM (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 WM stock at $224.72 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed WM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are WM 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 WM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 19.90%), the computed maximum profit is $865.39 per contract and the computed maximum loss is -$1,042.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a WM butterfly?: The breakeven for the WM butterfly priced on this page is roughly $210.43 and $229.58 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 WM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.71%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on WM?: Butterflies on WM are pinning bets - traders use them when they expect WM 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 WM implied volatility affect this butterfly?: WM ATM IV is at 19.90% with IV rank near 19.20%, 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.