Butterfly Spread Payoff Calculator
A long butterfly spread is a low-cost, defined-risk strategy that profits when the underlying expires near a target strike. It uses three equally spaced strikes: long one outer, short two middle, long one outer. This calculator computes the maximum profit, maximum loss, both breakevens and the profit or loss at any expiration price. Enter the three strikes, the net debit paid and the contract multiplier (100 for standard US equity options).
Butterfly spread payoff formula
Using call legs at expiration price P:
Value = max(0, P - k1) - 2 * max(0, P - k2) + max(0, P - k3)
P/L per share = Value - net debit
Total P/L = P/L per share * multiplier
Max profit = (wing width - net debit) * multiplier
Max loss = net debit * multiplier
Lower breakeven = k1 + net debit
Upper breakeven = k3 - net debit
Wing width is k2 - k1 (equal to k3 - k2 for a symmetric butterfly). The long butterfly's intrinsic value peaks at the middle strike and falls to zero outside the outer strikes.
Worked example
Strikes 95 / 100 / 105, net debit $1.50, multiplier 100. If the underlying closes at $100: value = max(0, 5) - 2 * max(0, 0) + max(0, -5) = 5. P/L per share = 5 - 1.50 = 3.50, so total P/L = $350.00. Maximum profit is (5 - 1.50) * 100 = $350.00. Maximum loss is 1.50 * 100 = $150.00. Lower breakeven = 95 + 1.50 = $96.50; upper breakeven = 105 - 1.50 = $103.50.
Butterfly spread: frequently asked questions
What is a long butterfly spread?
A long butterfly spread is a three-strike, defined-risk strategy. Using calls: buy one lower-strike call, sell two middle-strike calls, and buy one higher-strike call, with the strikes equally spaced. It is paid for with a net debit and profits most when the underlying expires exactly at the middle strike.
What are the maximum profit and loss?
Maximum profit is the wing width (distance between adjacent strikes) minus the net debit paid, times the multiplier, achieved when the underlying expires at the middle strike. Maximum loss is limited to the net debit paid, times the multiplier, occurring outside the outer strikes.
Where are the breakevens?
The lower breakeven is the lower strike plus the net debit per share. The upper breakeven is the higher strike minus the net debit per share. The position is profitable between these two prices at expiration.
Sources and method
- U.S. Securities and Exchange Commission investor education on options: Investor.gov: Options.
- Options Clearing Corporation: theocc.com.
- Payoff is the standard sum of three option expiration values minus the net debit; no proprietary data is used.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.