MDST Straddle Strategy
MDST (Westwood Salient Enhanced Midstream Income ETF), in the Financial Services sector, (Asset Management industry), listed on NYSE.
The fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in securities of Midstream North American corporations and Midstream U.S. master limited partnerships (“MLPs”). The fund is non-diversified.
MDST (Westwood Salient Enhanced Midstream Income ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $255.7M, a beta of 0.27 versus the broader market, a 52-week range of 24.93-29.75, average daily share volume of 59K, a public-listing history dating back to 2024. These structural characteristics shape how MDST etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.27 indicates MDST has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MDST pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on MDST?
A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration.
Current MDST snapshot
As of May 15, 2026, spot at $29.80, ATM IV 42.60%, expected move 12.21%. The straddle on MDST 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 straddle structure on MDST specifically: IV rank is unavailable in the current snapshot, so regime-based timing for MDST is inferred from ATM IV at 42.60% alone, with a market-implied 1-standard-deviation move of approximately 12.21% (roughly $3.64 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 MDST expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDST should anchor to the underlying notional of $29.80 per share and to the trader's directional view on MDST etf.
MDST straddle setup
The MDST straddle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MDST near $29.80, the first option leg uses a $30.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MDST 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 MDST shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $30.00 | $1.50 |
| Buy 1 | Put | $30.00 | $1.60 |
MDST straddle risk and reward
- Net Premium / Debit
- -$310.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$305.47
- Breakeven(s)
- $26.90, $33.10
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit.
MDST straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on MDST. 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% | +$2,689.00 |
| $6.60 | -77.9% | +$2,030.22 |
| $13.19 | -55.8% | +$1,371.43 |
| $19.77 | -33.6% | +$712.65 |
| $26.36 | -11.5% | +$53.86 |
| $32.95 | +10.6% | -$15.08 |
| $39.54 | +32.7% | +$643.70 |
| $46.12 | +54.8% | +$1,302.49 |
| $52.71 | +76.9% | +$1,961.27 |
| $59.30 | +99.0% | +$2,620.06 |
When traders use straddle on MDST
Straddles on MDST are pure-volatility plays that profit from large moves in either direction; traders typically buy MDST straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
MDST thesis for this straddle
The market-implied 1-standard-deviation range for MDST extends from approximately $26.16 on the downside to $33.44 on the upside. A MDST long straddle is a pure-volatility play: it profits when the underlying moves far enough from the strike in either direction to overcome the combined call plus put debit, regardless of direction. As a Financial Services name, MDST options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDST-specific events.
MDST straddle positions are structurally neutral / high-volatility (long premium); 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. MDST positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MDST alongside the broader basket even when MDST-specific fundamentals are unchanged. Always rebuild the position from current MDST chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on MDST?
- A straddle on MDST is the straddle strategy applied to MDST (etf). The strategy is structurally neutral / high-volatility (long premium): A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration. With MDST etf trading near $29.80, the strikes shown on this page are snapped to the nearest listed MDST chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MDST straddle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit. For the MDST straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 42.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$305.47 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MDST straddle?
- The breakeven for the MDST straddle priced on this page is roughly $26.90 and $33.10 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 MDST market-implied 1-standard-deviation expected move is approximately 12.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on MDST?
- Straddles on MDST are pure-volatility plays that profit from large moves in either direction; traders typically buy MDST straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
- How does current MDST implied volatility affect this straddle?
- Current MDST ATM IV is 42.60%; IV rank context is unavailable in the current snapshot.