How are ALSN 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 ALSN straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$960.65 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALSN straddle?

The breakeven for the ALSN straddle priced on this page is roughly $115.35 and $134.65 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALSN implied volatility affect this straddle?

ALSN ATM IV is at 32.50% with IV rank near 2.72%, 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.

ALSN Straddle Strategy

ALSN (Allison Transmission Holdings, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NYSE.

Allison Transmission Holdings, Inc. (ALSN), along with its affiliates, specializes in the global development, manufacturing, and sale of fully-automatic transmissions. These robust systems are engineered for both medium and heavy-duty commercial vehicles, as well as medium and heavy-tactical defense vehicles utilized by the U.S. military. The company's diverse product portfolio serves a broad spectrum of applications. This includes on-highway vehicles such as trucks for distribution, refuse collection, construction, fire, and emergency services, alongside school and transit buses, and recreational motor homes. Furthermore, Allison transmissions power off-highway equipment for the energy, mining, and construction industries, as well as both wheeled and tracked defense vehicles. New transmissions are marketed under the well-known Allison Transmission brand, while their remanufactured offerings are sold as ReTran.

ALSN (Allison Transmission Holdings, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $10.25B, a trailing P/E of 19.39, a beta of 0.95 versus the broader market, a 52-week range of 76.01-137.62, average daily share volume of 1.0M, a public-listing history dating back to 2012, approximately 4K full-time employees. These structural characteristics shape how ALSN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.95 places ALSN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ALSN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a straddle on ALSN?

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.

ALSN snapshot

As of August 14, 2026, spot at $125.67, ATM IV 32.50%, IV rank 2.72%, expected move 9.32%. The straddle on ALSN 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 straddle structure on ALSN specifically: ALSN IV at 32.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a ALSN straddle, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $11.71 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 ALSN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALSN should anchor to the underlying notional of $125.67 per share and to the trader's directional view on ALSN stock.

ALSN straddle setup

The ALSN straddle 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 ALSN at $125.67 on that close, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALSN 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 ALSN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$125.00	$5.05
Buy 1	Put	$125.00	$4.60

ALSN straddle risk and reward

Net Premium / Debit: -$965.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$960.65
Breakeven(s): $115.35, $134.65
Risk / Reward Ratio: Unbounded

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.

ALSN straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on ALSN. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	+$11,534.00
$27.80	-77.9%	+$8,755.48
$55.58	-55.8%	+$5,976.95
$83.37	-33.7%	+$3,198.43
$111.15	-11.6%	+$419.91
$138.94	+10.6%	+$428.61
$166.72	+32.7%	+$3,207.14
$194.51	+54.8%	+$5,985.66
$222.29	+76.9%	+$8,764.18
$250.08	+99.0%	+$11,542.70

When traders use straddle on ALSN

Straddles on ALSN are pure-volatility plays that profit from large moves in either direction; traders typically buy ALSN straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.

ALSN thesis for this straddle

The market-implied 1-standard-deviation range for ALSN extends from approximately $113.96 on the downside to $137.38 on the upside. A ALSN 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 ALSN IV rank near 2.72% 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 ALSN at 32.50%. As a Consumer Cyclical name, ALSN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALSN-specific events.

ALSN 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. ALSN positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALSN alongside the broader basket even when ALSN-specific fundamentals are unchanged. Always rebuild the position from current ALSN chain quotes before placing a trade.

Frequently asked questions

What is a straddle on ALSN?: A straddle on ALSN is the straddle strategy applied to ALSN (stock). 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 ALSN stock at $125.67 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ALSN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are ALSN 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 ALSN straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$960.65 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALSN straddle?: The breakeven for the ALSN straddle priced on this page is roughly $115.35 and $134.65 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on ALSN?: Straddles on ALSN are pure-volatility plays that profit from large moves in either direction; traders typically buy ALSN 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 ALSN implied volatility affect this straddle?: ALSN ATM IV is at 32.50% with IV rank near 2.72%, 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.