AIG Bear Put Spread Strategy
AIG (American International Group, Inc.), in the Financial Services sector, (Insurance - Diversified industry), listed on NYSE.
American International Group, Inc. offers insurance products for commercial, institutional, and individual customers in North America and internationally. The company's General Insurance segment provides general liability, environmental, commercial automobile liability, workers' compensation, casualty, and crisis management insurance products; commercial, industrial, and energy-related property insurance; and aerospace, political risk, trade credit, portfolio solutions, crop, and marine insurance. It also provides professional liability insurance products for a range of businesses and risks, including directors and officers, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. In addition, this segment offers personal auto and property insurance, such as auto, homeowners, umbrella, yacht, fine art, and collections; voluntary and sponsor-paid personal accident; supplemental health products; extended warranty insurance products; and travel insurance products. Its Life and Retirement segment offers variable annuities, index and fixed annuities, and retail mutual funds; and financial planning and advisory services; record-keeping, plan administrative, and compliance services; and term life and universal life insurance. It also provides stable value wrap products, and structured settlement and pension risk transfer annuities; and corporate- and bank-owned life insurance and guaranteed investment contracts.
AIG (American International Group, Inc.) trades in the Financial Services sector, specifically Insurance - Diversified, with a market capitalization of approximately $40.18B, a trailing P/E of 12.90, a beta of 0.54 versus the broader market, a 52-week range of 71.25-87.46, average daily share volume of 5.1M, a public-listing history dating back to 1973, approximately 22K full-time employees. These structural characteristics shape how AIG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.54 indicates AIG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. AIG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on AIG?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current AIG snapshot
As of May 15, 2026, spot at $76.13, ATM IV 23.01%, IV rank 32.08%, expected move 6.60%. The bear put spread on AIG 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 28-day expiry.
Why this bear put spread structure on AIG specifically: AIG IV at 23.01% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 6.60% (roughly $5.02 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 AIG expiries trade a higher absolute premium for lower per-day decay. Position sizing on AIG should anchor to the underlying notional of $76.13 per share and to the trader's directional view on AIG stock.
AIG bear put spread setup
The AIG bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With AIG near $76.13, the first option leg uses a $76.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AIG 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 AIG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $76.00 | $1.80 |
| Sell 1 | Put | $72.00 | $0.70 |
AIG bear put spread risk and reward
- Net Premium / Debit
- -$110.00
- Max Profit (per contract)
- $290.00
- Max Loss (per contract)
- -$110.00
- Breakeven(s)
- $74.90
- Risk / Reward Ratio
- 2.636
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
AIG bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on AIG. 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% | +$290.00 |
| $16.84 | -77.9% | +$290.00 |
| $33.67 | -55.8% | +$290.00 |
| $50.50 | -33.7% | +$290.00 |
| $67.34 | -11.6% | +$290.00 |
| $84.17 | +10.6% | -$110.00 |
| $101.00 | +32.7% | -$110.00 |
| $117.83 | +54.8% | -$110.00 |
| $134.66 | +76.9% | -$110.00 |
| $151.49 | +99.0% | -$110.00 |
When traders use bear put spread on AIG
Bear put spreads on AIG reduce the cost of a bearish AIG stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
AIG thesis for this bear put spread
The market-implied 1-standard-deviation range for AIG extends from approximately $71.11 on the downside to $81.15 on the upside. A AIG bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on AIG, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current AIG IV rank near 32.08% is mid-range against its 1-year distribution, so the IV signal is neutral; the bear put spread thesis on AIG should anchor more to the directional view and the expected-move geometry. As a Financial Services name, AIG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AIG-specific events.
AIG bear put spread positions are structurally moderately bearish; 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. AIG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AIG alongside the broader basket even when AIG-specific fundamentals are unchanged. Long-premium structures like a bear put spread on AIG are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current AIG chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on AIG?
- A bear put spread on AIG is the bear put spread strategy applied to AIG (stock). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With AIG stock trading near $76.13, the strikes shown on this page are snapped to the nearest listed AIG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AIG bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the AIG bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 23.01%), the computed maximum profit is $290.00 per contract and the computed maximum loss is -$110.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AIG bear put spread?
- The breakeven for the AIG bear put spread priced on this page is roughly $74.90 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 AIG market-implied 1-standard-deviation expected move is approximately 6.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on AIG?
- Bear put spreads on AIG reduce the cost of a bearish AIG stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current AIG implied volatility affect this bear put spread?
- AIG ATM IV is at 23.01% with IV rank near 32.08%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.