How are ZWS 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 ZWS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.30%), the computed maximum profit is $174.83 per contract and the computed maximum loss is -$52.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ZWS butterfly?

The breakeven for the ZWS butterfly priced on this page is roughly $48.03 and $51.98 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 ZWS market-implied 1-standard-deviation expected move is approximately 8.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ZWS implied volatility affect this butterfly?

ZWS ATM IV is at 28.30% with IV rank near 2.78%, 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.

ZWS Butterfly Strategy

ZWS (Zurn Elkay Water Solutions Corporation), in the Industrials sector, (Industrial - Pollution & Treatment Controls industry), listed on NYSE.

Zurn Elkay Water Solutions Corporation (ZEWS) is a leading provider of comprehensive water system solutions. The company is involved in the entire lifecycle, from design and procurement to manufacturing and marketing, with a focus on optimizing water quality, safety, flow management, and conservation within and around non-residential structures. ZEWS markets a diverse portfolio of products under several well-known brands. Under its flagship Zurn brand, offerings include finish plumbing fixtures, drainage and interception systems, water control and backflow prevention devices, fire protection equipment, PEX pipe fittings and accessories, and essential repair parts. The World Dryer brand specializes in hand and hair dryers, alongside baby changing stations. Furthermore, its Just Manufacturing brand provides a wide array of robust stainless steel products.

ZWS (Zurn Elkay Water Solutions Corporation) trades in the Industrials sector, specifically Industrial - Pollution & Treatment Controls, with a market capitalization of approximately $8.52B, a trailing P/E of 39.99, a beta of 0.82 versus the broader market, a 52-week range of 35.73-53.76, average daily share volume of 1.0M, a public-listing history dating back to 2012, approximately 3K full-time employees. These structural characteristics shape how ZWS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.82 places ZWS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 39.99 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ZWS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on ZWS?

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 ZWS snapshot

As of June 30, 2026, spot at $50.53, ATM IV 28.30%, IV rank 2.78%, expected move 8.11%. The butterfly on ZWS 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 80-day expiry.

Why this butterfly structure on ZWS specifically: ZWS IV at 28.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a ZWS butterfly, with a market-implied 1-standard-deviation move of approximately 8.11% (roughly $4.10 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ZWS expiries trade a higher absolute premium for lower per-day decay. Position sizing on ZWS should anchor to the underlying notional of $50.53 per share and to the trader's directional view on ZWS stock.

ZWS butterfly setup

The ZWS 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 ZWS near $50.53, the first option leg uses a $47.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ZWS chain at a 80-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 ZWS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$47.50	$5.25
Sell 2	Call	$50.00	$3.55
Buy 1	Call	$52.50	$2.38

ZWS butterfly risk and reward

Net Premium / Debit: -$52.50
Max Profit (per contract): $174.83
Max Loss (per contract): -$52.50
Breakeven(s): $48.03, $51.98
Risk / Reward Ratio: 3.330

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.

ZWS butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on ZWS. 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%	-$52.50
$11.18	-77.9%	-$52.50
$22.35	-55.8%	-$52.50
$33.52	-33.7%	-$52.50
$44.70	-11.5%	-$52.50
$55.87	+10.6%	-$52.50
$67.04	+32.7%	-$52.50
$78.21	+54.8%	-$52.50
$89.38	+76.9%	-$52.50
$100.55	+99.0%	-$52.50

When traders use butterfly on ZWS

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

ZWS thesis for this butterfly

The market-implied 1-standard-deviation range for ZWS extends from approximately $46.43 on the downside to $54.63 on the upside. A ZWS long call butterfly is a pinning play: it pays maximum at the middle strike if ZWS settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current ZWS IV rank near 2.78% 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 ZWS at 28.30%. As a Industrials name, ZWS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ZWS-specific events.

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

Frequently asked questions

What is a butterfly on ZWS?: A butterfly on ZWS is the butterfly strategy applied to ZWS (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 ZWS stock trading near $50.53, the strikes shown on this page are snapped to the nearest listed ZWS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ZWS 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 ZWS butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 28.30%), the computed maximum profit is $174.83 per contract and the computed maximum loss is -$52.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ZWS butterfly?: The breakeven for the ZWS butterfly priced on this page is roughly $48.03 and $51.98 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 ZWS market-implied 1-standard-deviation expected move is approximately 8.11%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on ZWS?: Butterflies on ZWS are pinning bets - traders use them when they expect ZWS 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 ZWS implied volatility affect this butterfly?: ZWS ATM IV is at 28.30% with IV rank near 2.78%, 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.