AFYA Strangle Strategy
AFYA (Afya Limited), in the Consumer Defensive sector, (Education & Training Services industry), listed on NASDAQ.
Afya Limited, operating through its subsidiaries, is a prominent medical education provider in Brazil. The company delivers a comprehensive array of educational products and services primarily focused on the medical field, encompassing medical schools, preparatory courses for medical residency, advanced graduate studies, and various other programs tailored for medical professionals at all career stages. These offerings are available across its proprietary network and are also extended to external medical institutions. Beyond traditional education, Afya also offers digital health services through a subscription-based platform, accessible via a mobile app and website. This platform is specifically designed to assist healthcare practitioners and students with clinical decision-making by providing essential tools such as medical calculators, reference charts, up-to-date content, prescription guidance, clinical scoring systems, details on medical procedures, and laboratory examination information. While strong in medicine, Afya's educational portfolio spans a broader spectrum of health sciences, including dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine.
AFYA (Afya Limited) trades in the Consumer Defensive sector, specifically Education & Training Services, with a market capitalization of approximately $1.34B, a trailing P/E of 9.09, a beta of 0.37 versus the broader market, a 52-week range of 13-18.155, average daily share volume of 96K, a public-listing history dating back to 2019, approximately 5K full-time employees. These structural characteristics shape how AFYA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.37 indicates AFYA has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 9.09 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. AFYA pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on AFYA?
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 AFYA snapshot
As of June 29, 2026, spot at $14.95, ATM IV 72.50%, IV rank 25.81%, expected move 20.79%. The strangle on AFYA 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 18-day expiry.
Why this strangle structure on AFYA specifically: AFYA IV at 72.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a AFYA strangle, with a market-implied 1-standard-deviation move of approximately 20.79% (roughly $3.11 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AFYA expiries trade a higher absolute premium for lower per-day decay. Position sizing on AFYA should anchor to the underlying notional of $14.95 per share and to the trader's directional view on AFYA stock.
AFYA strangle setup
The AFYA 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 AFYA near $14.95, the first option leg uses a $15.70 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AFYA chain at a 18-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 AFYA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $15.70 | N/A |
| Buy 1 | Put | $14.20 | N/A |
AFYA 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.
AFYA strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on AFYA. 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 AFYA
Strangles on AFYA 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 AFYA chain.
AFYA thesis for this strangle
The market-implied 1-standard-deviation range for AFYA extends from approximately $11.84 on the downside to $18.06 on the upside. A AFYA 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 AFYA IV rank near 25.81% 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 AFYA at 72.50%. As a Consumer Defensive name, AFYA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AFYA-specific events.
AFYA 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. AFYA positions also carry Consumer Defensive sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AFYA alongside the broader basket even when AFYA-specific fundamentals are unchanged. Always rebuild the position from current AFYA chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on AFYA?
- A strangle on AFYA is the strangle strategy applied to AFYA (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 AFYA stock trading near $14.95, the strikes shown on this page are snapped to the nearest listed AFYA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AFYA 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 AFYA strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 72.50%), 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 AFYA strangle?
- The breakeven for the AFYA strangle 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 AFYA market-implied 1-standard-deviation expected move is approximately 20.79%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on AFYA?
- Strangles on AFYA 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 AFYA chain.
- How does current AFYA implied volatility affect this strangle?
- AFYA ATM IV is at 72.50% with IV rank near 25.81%, 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.