How are ZTS 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 ZTS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 36.20%), the computed maximum profit is $245.00 per contract and the computed maximum loss is -$255.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ZTS butterfly?

The breakeven for the ZTS butterfly priced on this page is roughly $72.45 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 ZTS market-implied 1-standard-deviation expected move is approximately 10.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ZTS implied volatility affect this butterfly?

ZTS ATM IV is at 36.20% with IV rank near 26.86%, 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.

ZTS Butterfly Strategy

ZTS (Zoetis Inc.), in the Healthcare sector, (Drug Manufacturers - General industry), listed on NYSE.

Zoetis Inc. stands as a global leader in animal health, focusing on the research, development, manufacturing, and commercialization of veterinary pharmaceuticals, vaccines, and diagnostic tools. Its comprehensive portfolio serves a broad spectrum of species, encompassing both livestock, including cattle, swine, poultry, fish, and sheep, and beloved companion animals such as dogs, cats, and horses. Among its pharmaceutical offerings are various therapeutic agents. This includes vaccines, vital for preventing respiratory, gastrointestinal, and reproductive diseases by stimulating a targeted immune response; anti-infectives that combat or inhibit the proliferation of bacterial, fungal, or protozoal pathogens; and parasiticides aimed at eradicating both internal and external pests such as fleas, ticks, and various worms. Additional pharmaceuticals address areas such as pain management and sedation, anti-emesis, reproductive health, and oncology. The portfolio also features dermatological solutions for allergic skin conditions and atopic dermatitis, alongside medicated feed additives specifically designed for livestock.

ZTS (Zoetis Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - General, with a market capitalization of approximately $31.88B, a trailing P/E of 12.15, a beta of 0.74 versus the broader market, a 52-week range of 72.38-161.77, average daily share volume of 6.4M, a public-listing history dating back to 2013, approximately 14K full-time employees. These structural characteristics shape how ZTS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.74 places ZTS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ZTS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ZTS?

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 ZTS snapshot

As of June 30, 2026, spot at $72.09, ATM IV 36.20%, IV rank 26.86%, expected move 10.38%. The butterfly on ZTS 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 17-day expiry.

Why this butterfly structure on ZTS specifically: ZTS IV at 36.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a ZTS butterfly, with a market-implied 1-standard-deviation move of approximately 10.38% (roughly $7.48 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ZTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZTS should anchor to the underlying notional of $72.09 per share and to the trader's directional view on ZTS stock.

ZTS butterfly setup

The ZTS 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 ZTS near $72.09, the first option leg uses a $70.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZTS chain at a 17-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 ZTS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$70.00	$3.60
Sell 2	Call	$70.00	$3.60
Buy 1	Call	$75.00	$1.15

ZTS butterfly risk and reward

Net Premium / Debit: +$245.00
Max Profit (per contract): $245.00
Max Loss (per contract): -$255.00
Breakeven(s): $72.45
Risk / Reward Ratio: 0.961

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.

ZTS butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ZTS. 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%	+$245.00
$15.95	-77.9%	+$245.00
$31.89	-55.8%	+$245.00
$47.83	-33.7%	+$245.00
$63.76	-11.6%	+$245.00
$79.70	+10.6%	-$255.00
$95.64	+32.7%	-$255.00
$111.58	+54.8%	-$255.00
$127.52	+76.9%	-$255.00
$143.46	+99.0%	-$255.00

When traders use butterfly on ZTS

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

ZTS thesis for this butterfly

The market-implied 1-standard-deviation range for ZTS extends from approximately $64.61 on the downside to $79.57 on the upside. A ZTS long call butterfly is a pinning play: it pays maximum at the middle strike if ZTS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ZTS IV rank near 26.86% 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 ZTS at 36.20%. As a Healthcare name, ZTS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZTS-specific events.

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

Frequently asked questions

What is a butterfly on ZTS?: A butterfly on ZTS is the butterfly strategy applied to ZTS (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 ZTS stock trading near $72.09, the strikes shown on this page are snapped to the nearest listed ZTS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ZTS 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 ZTS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 36.20%), the computed maximum profit is $245.00 per contract and the computed maximum loss is -$255.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ZTS butterfly?: The breakeven for the ZTS butterfly priced on this page is roughly $72.45 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 ZTS market-implied 1-standard-deviation expected move is approximately 10.38%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ZTS?: Butterflies on ZTS are pinning bets - traders use them when they expect ZTS 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 ZTS implied volatility affect this butterfly?: ZTS ATM IV is at 36.20% with IV rank near 26.86%, 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.