Use this butterfly calculator to estimate payoff, breakeven points, and risk/reward for a long call butterfly spread at expiration. If you trade options, this helps you quickly test strike combinations and premiums before placing a position.
Options Butterfly Spread Calculator
Enter strikes and premiums for: Buy 1 lower strike call, Sell 2 middle strike calls, Buy 1 upper strike call.
What is a butterfly spread?
A butterfly spread is an options strategy designed for a market you expect to stay near a target price. The classic long call butterfly uses three strikes with the same expiration:
- Buy 1 call at a lower strike (K1)
- Sell 2 calls at a middle strike (K2)
- Buy 1 call at an upper strike (K3)
The result is a tent-shaped payoff profile at expiration. Maximum profit is typically centered around the middle strike. Risk is limited and known in advance.
How this butterfly calculator works
Core calculations
This tool calculates the net entry cost, best-case outcome, worst-case outcome, and breakeven points using your strike and premium inputs.
- Net debit/credit (per share): P1 + P3 - 2×P2
- Payoff at expiration (per share): max(S-K1,0) - 2×max(S-K2,0) + max(S-K3,0) - net debit
- Total P/L: payoff × spreads × multiplier
Interpreting outputs
For a standard, evenly spaced butterfly (K2-K1 equals K3-K2), you usually see:
- Maximum profit near K2 at expiration
- Maximum loss near far downside or far upside
- Two breakeven points if the net debit is less than wing width
If wing widths are uneven, this becomes a broken-wing butterfly and edge behavior changes. The calculator still computes payoff using the full formula.
Example walkthrough
Suppose you set strikes at 95 / 100 / 105 and enter premiums of 6.20, 3.40, and 1.10. The net debit is 0.50 per share (or $50 per 1-lot with a 100 multiplier). If the stock expires exactly at 100, the structure reaches its peak payoff. If the stock expires far below 95 or far above 105 (for a standard butterfly), the position tends toward the maximum loss equal to the initial debit.
When a butterfly spread can make sense
- You expect low volatility into expiration.
- You have a clear target price zone around the middle strike.
- You want limited risk with defined capital exposure.
- You prefer a lower-cost alternative to some directional trades.
Risks and limitations
Model simplifications
This calculator focuses on expiration outcomes. Real-world P/L before expiration also depends on implied volatility, time decay, early assignment risk, bid/ask spreads, and execution quality.
Practical considerations
- Commission and fees can materially impact small butterflies.
- Low-liquidity strikes may produce poor fills.
- Holding to expiration can involve pin risk near strikes.
Use this as a planning tool, then confirm with your broker’s risk analytics and current market data.