UNL Straddle Strategy
UNL (United States 12 Month Natural Gas Fund LP), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Benchmark Futures Contracts are the futures contracts on natural gas as traded on the NYMEX that are the near month contract to expire, and the contracts for the following 11 months, for a total of 12 consecutive months’ contracts, except when the near month contract is within two weeks of expiration.
UNL (United States 12 Month Natural Gas Fund LP) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $8.4M, a beta of 1.28 versus the broader market, a 52-week range of 6.34-9.64, average daily share volume of 102K, a public-listing history dating back to 2010. These structural characteristics shape how UNL etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.28 places UNL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a straddle on UNL?
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 UNL snapshot
As of May 15, 2026, spot at $6.50, ATM IV 26.00%, IV rank 5.73%, expected move 7.45%. The straddle on UNL 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 UNL specifically: UNL IV at 26.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a UNL straddle, with a market-implied 1-standard-deviation move of approximately 7.45% (roughly $0.48 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 UNL expiries trade a higher absolute premium for lower per-day decay. Position sizing on UNL should anchor to the underlying notional of $6.50 per share and to the trader's directional view on UNL etf.
UNL straddle setup
The UNL 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 UNL near $6.50, the first option leg uses a $6.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UNL 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 UNL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $6.50 | N/A |
| Buy 1 | Put | $6.50 | N/A |
UNL straddle 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 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.
UNL straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on UNL. 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 straddle on UNL
Straddles on UNL are pure-volatility plays that profit from large moves in either direction; traders typically buy UNL straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
UNL thesis for this straddle
The market-implied 1-standard-deviation range for UNL extends from approximately $6.02 on the downside to $6.98 on the upside. A UNL 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. Current UNL IV rank near 5.73% 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 UNL at 26.00%. As a Financial Services name, UNL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UNL-specific events.
UNL 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. UNL positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UNL alongside the broader basket even when UNL-specific fundamentals are unchanged. Always rebuild the position from current UNL chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on UNL?
- A straddle on UNL is the straddle strategy applied to UNL (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 UNL etf trading near $6.50, the strikes shown on this page are snapped to the nearest listed UNL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UNL 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 UNL straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 26.00%), 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 UNL straddle?
- The breakeven for the UNL straddle priced on this page is no defined breakeven on the modeled curve 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 UNL market-implied 1-standard-deviation expected move is approximately 7.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on UNL?
- Straddles on UNL are pure-volatility plays that profit from large moves in either direction; traders typically buy UNL 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 UNL implied volatility affect this straddle?
- UNL ATM IV is at 26.00% with IV rank near 5.73%, 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.