MAGS Strangle Strategy
MAGS (Roundhill Magnificent Seven ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
Listed Funds Trust - Roundhill Magnificent Seven ETF is an exchange traded fund launched by Listed Funds Trust. The fund is co-managed by Exchange Traded Concepts, LLC, Roundhill Financial Inc. It invests in public equity markets. The fund invests directly and through derivatives in stocks of companies operating across Information technology, semiconductors and semiconductor equipment, semiconductors, software and services, software, technology hardware and equipment, automotive, e-commerce discretionary and internet media & services sectors. The fund uses derivatives such as swaps, forwards to create its portfolio. The fund invests in growth and value stocks of large-cap companies.
MAGS (Roundhill Magnificent Seven ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $3.22B, a beta of 1.27 versus the broader market, a 52-week range of 54.39-71.16, average daily share volume of 4.0M, a public-listing history dating back to 2023, approximately 394 full-time employees. These structural characteristics shape how MAGS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.27 places MAGS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MAGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on MAGS?
A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money.
Current MAGS snapshot
As of June 30, 2026, spot at $64.22, ATM IV 29.63%, IV rank 71.35%, expected move 8.49%. The strangle on MAGS 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 31-day expiry.
Why this strangle structure on MAGS specifically: MAGS IV at 29.63% is rich versus its 1-year range, which makes a premium-buying MAGS strangle relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 8.49% (roughly $5.45 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MAGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on MAGS should anchor to the underlying notional of $64.22 per share and to the trader's directional view on MAGS etf.
MAGS strangle setup
The MAGS strangle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MAGS near $64.22, the first option leg uses a $67.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MAGS chain at a 31-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 MAGS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $67.50 | $0.93 |
| Buy 1 | Put | $61.00 | $1.18 |
MAGS strangle risk and reward
- Net Premium / Debit
- -$210.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$210.00
- Breakeven(s)
- $58.90, $69.60
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit.
MAGS strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on MAGS. 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% | +$5,889.00 |
| $14.21 | -77.9% | +$4,469.17 |
| $28.41 | -55.8% | +$3,049.34 |
| $42.60 | -33.7% | +$1,629.51 |
| $56.80 | -11.5% | +$209.68 |
| $71.00 | +10.6% | +$140.15 |
| $85.20 | +32.7% | +$1,559.97 |
| $99.40 | +54.8% | +$2,979.80 |
| $113.60 | +76.9% | +$4,399.63 |
| $127.79 | +99.0% | +$5,819.46 |
When traders use strangle on MAGS
Strangles on MAGS are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the MAGS chain.
MAGS thesis for this strangle
The market-implied 1-standard-deviation range for MAGS extends from approximately $58.77 on the downside to $69.67 on the upside. A MAGS long strangle is the OTM cousin of the straddle: lower up-front cost but the underlying has to travel further past either OTM strike before the position turns profitable at expiration. Current MAGS IV rank near 71.35% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MAGS at 29.63%. As a Financial Services name, MAGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MAGS-specific events.
MAGS strangle positions are structurally neutral / high-volatility (long premium, OTM); 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. MAGS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MAGS alongside the broader basket even when MAGS-specific fundamentals are unchanged. Always rebuild the position from current MAGS chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on MAGS?
- A strangle on MAGS is the strangle strategy applied to MAGS (etf). The strategy is structurally neutral / high-volatility (long premium, OTM): A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money. With MAGS etf trading near $64.22, the strikes shown on this page are snapped to the nearest listed MAGS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MAGS strangle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit. For the MAGS strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 29.63%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$210.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MAGS strangle?
- The breakeven for the MAGS strangle priced on this page is roughly $58.90 and $69.60 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 MAGS market-implied 1-standard-deviation expected move is approximately 8.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on MAGS?
- Strangles on MAGS are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the MAGS chain.
- How does current MAGS implied volatility affect this strangle?
- MAGS ATM IV is at 29.63% with IV rank near 71.35%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.