How are XYL 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 XYL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $342.20 per contract and the computed maximum loss is -$147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a XYL butterfly?

The breakeven for the XYL butterfly priced on this page is roughly $106.48 and $113.53 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 XYL market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current XYL implied volatility affect this butterfly?

XYL ATM IV is at 27.70% with IV rank near 44.50%, 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.

XYL Butterfly Strategy

XYL (Xylem Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally. It operates through three segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. The Water Infrastructure segment offers various products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment under the Flygt, Godwin, Wedeco, Sanitaire, Leopold, Wedeco, and Xylem Vue brand names for the transportation and treatment of water. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue and Flojet brand names for residential and commercial building services, and industrial water applications. The Measurement & Control Solutions segment provides smart meters, networked communication devices, and measurement and control technologies, as well as critical infrastructure technologies. It also offers software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment and managed services.

XYL (Xylem Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $25.91B, a trailing P/E of 27.20, a beta of 1.08 versus the broader market, a 52-week range of 108.965-154.27, average daily share volume of 2.2M, a public-listing history dating back to 2011, approximately 23K full-time employees. These structural characteristics shape how XYL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.08 places XYL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XYL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on XYL?

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 XYL snapshot

As of May 15, 2026, spot at $108.26, ATM IV 27.70%, IV rank 44.50%, expected move 7.94%. The butterfly on XYL 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 XYL specifically: XYL IV at 27.70% 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 7.94% (roughly $8.60 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 XYL expiries trade a higher absolute premium for lower per-day decay. Position sizing on XYL should anchor to the underlying notional of $108.26 per share and to the trader's directional view on XYL stock.

XYL butterfly setup

The XYL 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 XYL near $108.26, the first option leg uses a $105.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XYL 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 XYL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$105.00	$5.75
Sell 2	Call	$110.00	$2.83
Buy 1	Call	$115.00	$1.38

XYL butterfly risk and reward

Net Premium / Debit: -$147.50
Max Profit (per contract): $342.20
Max Loss (per contract): -$147.50
Breakeven(s): $106.48, $113.53
Risk / Reward Ratio: 2.320

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.

XYL butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on XYL. 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%	-$147.50
$23.95	-77.9%	-$147.50
$47.88	-55.8%	-$147.50
$71.82	-33.7%	-$147.50
$95.75	-11.6%	-$147.50
$119.69	+10.6%	-$147.50
$143.62	+32.7%	-$147.50
$167.56	+54.8%	-$147.50
$191.50	+76.9%	-$147.50
$215.43	+99.0%	-$147.50

When traders use butterfly on XYL

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

XYL thesis for this butterfly

The market-implied 1-standard-deviation range for XYL extends from approximately $99.66 on the downside to $116.86 on the upside. A XYL long call butterfly is a pinning play: it pays maximum at the middle strike if XYL settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current XYL IV rank near 44.50% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on XYL should anchor more to the directional view and the expected-move geometry. As a Industrials name, XYL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XYL-specific events.

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

Frequently asked questions

What is a butterfly on XYL?: A butterfly on XYL is the butterfly strategy applied to XYL (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 XYL stock trading near $108.26, the strikes shown on this page are snapped to the nearest listed XYL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are XYL 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 XYL butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), the computed maximum profit is $342.20 per contract and the computed maximum loss is -$147.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a XYL butterfly?: The breakeven for the XYL butterfly priced on this page is roughly $106.48 and $113.53 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 XYL market-implied 1-standard-deviation expected move is approximately 7.94%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on XYL?: Butterflies on XYL are pinning bets - traders use them when they expect XYL 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 XYL implied volatility affect this butterfly?: XYL ATM IV is at 27.70% with IV rank near 44.50%, 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.