ABG Strangle Strategy
ABG (Asbury Automotive Group, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It operates through Dealerships; and Total Care Auto, Powered by Asbury (TCA) segments. The company offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, collision repair, and reconditioning services for used vehicles. It also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended vehicle service contracts, guaranteed asset protection debt cancellation, prepaid maintenance contracts, key replacement contracts, paintless dent repair contracts, appearance protection contracts, tire and wheel, and lease wear and tear contracts. The company sells its products and services to individual retail customers, other dealers, and licensed wholesalers through its network of dealerships, as well as at auctions. Asbury Automotive Group, Inc. was founded in 1996 and is headquartered in Atlanta, Georgia.
ABG (Asbury Automotive Group, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $3.90B, a trailing P/E of 7.81, a beta of 0.72 versus the broader market, a 52-week range of 172.01-263.38, average daily share volume of 268K, a public-listing history dating back to 2002, approximately 15K full-time employees. These structural characteristics shape how ABG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.72 places ABG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 7.81 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. ABG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on ABG?
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.
ABG snapshot
As of August 14, 2026, spot at $211.10, ATM IV 37.90%, IV rank 3.90%, expected move 10.87%. The strangle on ABG below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this strangle structure on ABG specifically: ABG IV at 37.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a ABG strangle, with a market-implied 1-standard-deviation move of approximately 10.87% (roughly $22.94 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ABG expiries trade a higher absolute premium for lower per-day decay. Position sizing on ABG should anchor to the underlying notional of $211.10 per share and to the trader's directional view on ABG stock.
ABG strangle setup
The ABG strangle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ABG at $211.10 on that close, the first option leg uses a $220.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ABG chain at a 35-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 ABG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $220.00 | $6.80 |
| Buy 1 | Put | $200.00 | $5.20 |
ABG strangle risk and reward
- Net Premium / Debit
- -$1,200.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$1,200.00
- Breakeven(s)
- $188.00, $232.00
- 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.
ABG strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on ABG. 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% | +$18,799.00 |
| $46.68 | -77.9% | +$14,131.57 |
| $93.36 | -55.8% | +$9,464.15 |
| $140.03 | -33.7% | +$4,796.72 |
| $186.71 | -11.6% | +$129.29 |
| $233.38 | +10.6% | +$138.14 |
| $280.06 | +32.7% | +$4,805.56 |
| $326.73 | +54.8% | +$9,472.99 |
| $373.40 | +76.9% | +$14,140.42 |
| $420.08 | +99.0% | +$18,807.84 |
When traders use strangle on ABG
Strangles on ABG 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 ABG chain.
ABG thesis for this strangle
The market-implied 1-standard-deviation range for ABG extends from approximately $188.16 on the downside to $234.04 on the upside. A ABG 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 ABG IV rank near 3.90% 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 ABG at 37.90%. As a Consumer Cyclical name, ABG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ABG-specific events.
ABG 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. ABG positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ABG alongside the broader basket even when ABG-specific fundamentals are unchanged. Always rebuild the position from current ABG chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on ABG?
- A strangle on ABG is the strangle strategy applied to ABG (stock). 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 ABG stock at $211.10 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ABG chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ABG 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 ABG strangle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,200.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ABG strangle?
- The breakeven for the ABG strangle priced on this page is roughly $188.00 and $232.00 at expiration, derived from the August 14, 2026 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 ABG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.87%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on ABG?
- Strangles on ABG 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 ABG chain.
- How does current ABG implied volatility affect this strangle?
- ABG ATM IV is at 37.90% with IV rank near 3.90%, 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.