How are YUM 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 YUM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 23.30%), the computed maximum profit is $473.90 per contract and the computed maximum loss is -$507.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a YUM butterfly?

The breakeven for the YUM butterfly priced on this page is roughly $145.08 and $155.64 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 YUM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current YUM implied volatility affect this butterfly?

YUM ATM IV is at 23.30% with IV rank near 35.31%, 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.

YUM Butterfly Strategy

YUM (Yum! Brands, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NYSE.

YUM! Brands, Inc. (YUM) is a leading global quick-service restaurant enterprise that focuses on the creation, management, and franchising of its restaurant concepts internationally. Its business is organized into four main divisions: KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. The company operates establishments under these well-known brands, offering diverse food categories such as chicken, pizza, Mexican-style dishes, and made-to-order chargrilled burgers and sandwiches, among other food products. As of December 31, 2021, YUM! Brands boasted a significant worldwide presence, comprising 26,934 KFC outlets, 18,381 Pizza Hut locations, 7,791 Taco Bell restaurants, and 318 The Habit Burger Grill units, spread across roughly 157 countries and territories.

YUM (Yum! Brands, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $41.45B, a trailing P/E of 18.79, a beta of 0.55 versus the broader market, a 52-week range of 137.33-170.14, average daily share volume of 2.2M, a public-listing history dating back to 1997, approximately 49K full-time employees. These structural characteristics shape how YUM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

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

What is a butterfly on YUM?

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.

YUM snapshot

As of August 14, 2026, spot at $149.06, ATM IV 23.30%, IV rank 35.31%, expected move 6.68%. The butterfly on YUM 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 YUM specifically: YUM IV at 23.30% 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 6.68% (roughly $9.96 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 YUM expiries trade a higher absolute premium for lower per-day decay. Position sizing on YUM should anchor to the underlying notional of $149.06 per share and to the trader's directional view on YUM stock.

YUM butterfly setup

The YUM 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 YUM at $149.06 on that close, the first option leg uses a $140.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed YUM 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 YUM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$140.00	$10.65
Sell 2	Call	$150.00	$3.75
Buy 1	Call	$155.00	$1.93

YUM butterfly risk and reward

Net Premium / Debit: -$507.50
Max Profit (per contract): $473.90
Max Loss (per contract): -$507.50
Breakeven(s): $145.08, $155.64
Risk / Reward Ratio: 0.934

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.

YUM butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on YUM. 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%	-$507.50
$32.97	-77.9%	-$507.50
$65.92	-55.8%	-$507.50
$98.88	-33.7%	-$507.50
$131.84	-11.6%	-$507.50
$164.79	+10.6%	-$7.50
$197.75	+32.7%	-$7.50
$230.71	+54.8%	-$7.50
$263.67	+76.9%	-$7.50
$296.62	+99.0%	-$7.50

When traders use butterfly on YUM

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

YUM thesis for this butterfly

The market-implied 1-standard-deviation range for YUM extends from approximately $139.10 on the downside to $159.02 on the upside. A YUM long call butterfly is a pinning play: it pays maximum at the middle strike if YUM settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current YUM IV rank near 35.31% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on YUM should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, YUM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to YUM-specific events.

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

Frequently asked questions

What is a butterfly on YUM?: A butterfly on YUM is the butterfly strategy applied to YUM (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 YUM stock at $149.06 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed YUM chain strike and the premiums come straight from that session's bid/ask midpoint.
How are YUM 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 YUM butterfly priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 23.30%), the computed maximum profit is $473.90 per contract and the computed maximum loss is -$507.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a YUM butterfly?: The breakeven for the YUM butterfly priced on this page is roughly $145.08 and $155.64 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 YUM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on YUM?: Butterflies on YUM are pinning bets - traders use them when they expect YUM 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 YUM implied volatility affect this butterfly?: YUM ATM IV is at 23.30% with IV rank near 35.31%, 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.