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 39.70%), the computed maximum profit is $349.43 per contract and the computed maximum loss is -$137.50 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 $71.38 and $78.63 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 11.38%; 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 39.70% with IV rank near 33.63%, 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.

ZTS Butterfly Strategy

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

Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally. It commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep; and companion animals comprising dogs, cats, and horses. The company also offers vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal, and reproductive tracts or induce a specific immune response; anti-infectives that prevent, kill, or slow the growth of bacteria, fungi, or protozoa; and parasiticides that prevent or eliminate external and internal parasites, which include fleas, ticks, and worms. It also provides other pharmaceutical products that comprise pain and sedation, antiemetic, reproductive, and oncology products; dermatology products for itch associated with allergic conditions and atopic dermatitis; and medicated feed additives, which offer medicines to livestock. In addition, the company provides portable blood and urine analysis testing, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, including nutritionals and agribusiness services, as well as products and services in areas, such as biodevices, genetics tests, and precision animal health. It markets its products to veterinarians, livestock producers, and retail outlets, as well as third-party veterinary distributors through its sales representatives, and technical and veterinary operations specialists.

ZTS (Zoetis Inc.) trades in the Healthcare sector, specifically Drug Manufacturers - Specialty & Generic, with a market capitalization of approximately $31.17B, a trailing P/E of 11.87, a beta of 0.86 versus the broader market, a 52-week range of 74.29-172.23, average daily share volume of 4.7M, 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 0.86 places ZTS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.87 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. 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 May 15, 2026, spot at $74.01, ATM IV 39.70%, IV rank 33.63%, expected move 11.38%. 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 34-day expiry.

Why this butterfly structure on ZTS specifically: ZTS IV at 39.70% 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 11.38% (roughly $8.42 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 ZTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZTS should anchor to the underlying notional of $74.01 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 $74.01, 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 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 ZTS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$70.00	$6.40
Sell 2	Call	$75.00	$3.30
Buy 1	Call	$80.00	$1.58

ZTS butterfly risk and reward

Net Premium / Debit: -$137.50
Max Profit (per contract): $349.43
Max Loss (per contract): -$137.50
Breakeven(s): $71.38, $78.63
Risk / Reward Ratio: 2.541

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.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$137.50
$16.37	-77.9%	-$137.50
$32.74	-55.8%	-$137.50
$49.10	-33.7%	-$137.50
$65.46	-11.6%	-$137.50
$81.82	+10.6%	-$137.50
$98.19	+32.7%	-$137.50
$114.55	+54.8%	-$137.50
$130.91	+76.9%	-$137.50
$147.28	+99.0%	-$137.50

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 $65.59 on the downside to $82.43 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 33.63% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on ZTS should anchor more to the directional view and the expected-move geometry. 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 $74.01, 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 39.70%), the computed maximum profit is $349.43 per contract and the computed maximum loss is -$137.50 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 $71.38 and $78.63 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 11.38%; 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 39.70% with IV rank near 33.63%, 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.