MSOS Strangle Strategy
MSOS (AdvisorShares Pure US Cannabis ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
MSOS is the groundbreaking actively managed ETF, listed in the U.S., providing focused exposure exclusively to American cannabis companies, including multi-state operators. The fund's portfolio strategically allocates capital across a wide array of U.S.-based cannabis-related businesses. Offering seamless access, MSOS trades on the NYSE Arca, enabling investors to gain exposure to numerous U.S. cannabis securities through a single, convenient trade. Directly investing in individual U.S. cannabis firms often necessitates sourcing them on smaller, foreign exchanges. The ETF benefits from a portfolio manager with profound capital markets experience and established expertise in navigating highly-regulated equity sectors, notably cannabis. All MSOS assets are securely held by BNY Mellon, one of the largest U.S. custodial banks.
MSOS (AdvisorShares Pure US Cannabis ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $592.2M, a beta of 0.86 versus the broader market, a 52-week range of 2.96-7.25, average daily share volume of 7.8M, a public-listing history dating back to 2020. These structural characteristics shape how MSOS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.86 places MSOS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MSOS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on MSOS?
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.
MSOS snapshot
As of August 14, 2026, spot at $4.56, ATM IV 50.26%, IV rank 8.48%, expected move 14.41%. The strangle on MSOS below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this strangle structure on MSOS specifically: MSOS IV at 50.26% is on the cheap side of its 1-year range, which favors premium-buying structures like a MSOS strangle, with a market-implied 1-standard-deviation move of approximately 14.41% (roughly $0.66 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MSOS expiries trade a higher absolute premium for lower per-day decay. Position sizing on MSOS should anchor to the underlying notional of $4.56 per share and to the trader's directional view on MSOS etf.
MSOS strangle setup
The MSOS 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 MSOS at $4.56 on that close, the first option leg uses a $4.79 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MSOS chain at a 28-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 MSOS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $4.79 | N/A |
| Buy 1 | Put | $4.33 | N/A |
MSOS strangle risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
MSOS strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on MSOS. 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.
When traders use strangle on MSOS
Strangles on MSOS 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 MSOS chain.
MSOS thesis for this strangle
The market-implied 1-standard-deviation range for MSOS extends from approximately $3.90 on the downside to $5.22 on the upside. A MSOS 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 MSOS IV rank near 8.48% 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 MSOS at 50.26%. As a Financial Services name, MSOS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MSOS-specific events.
MSOS 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. MSOS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MSOS alongside the broader basket even when MSOS-specific fundamentals are unchanged. Always rebuild the position from current MSOS chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on MSOS?
- A strangle on MSOS is the strangle strategy applied to MSOS (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 MSOS etf at $4.56 on the most recent close, the strikes shown on this page are snapped to the nearest listed MSOS chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are MSOS 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 MSOS strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 50.26%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MSOS strangle?
- The breakeven for the MSOS strangle priced on this page is no defined breakeven on the modeled curve at expiration, derived from the end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MSOS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.41%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on MSOS?
- Strangles on MSOS 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 MSOS chain.
- How does current MSOS implied volatility affect this strangle?
- MSOS ATM IV is at 50.26% with IV rank near 8.48%, 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.