How are BTU 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 BTU strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 60.11%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$233.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BTU strangle?

The breakeven for the BTU strangle priced on this page is roughly $19.67 and $26.34 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 BTU market-implied 1-standard-deviation expected move is approximately 17.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BTU implied volatility affect this strangle?

BTU ATM IV is at 60.11% with IV rank near 37.17%, 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.

BTU Strangle Strategy

BTU (Peabody Energy Corporation), in the Energy sector, (Coal industry), listed on NYSE.

Headquartered in St. Louis, Missouri, and founded in 1883, Peabody Energy Corporation operates as a prominent global entity in the coal mining sector. Its vast operations encompass the United States, Australia, Japan, India, China, and several other countries across Asia and beyond. The company organizes its extensive activities into key divisions: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, and other U.S. Thermal Mining segments. Peabody's core business involves the extraction, processing, and sale of various types of coal.

BTU (Peabody Energy Corporation) trades in the Energy sector, specifically Coal, with a market capitalization of approximately $2.86B, a beta of 0.34 versus the broader market, a 52-week range of 12.67-41.14, average daily share volume of 3.5M, a public-listing history dating back to 2017, approximately 6K full-time employees. These structural characteristics shape how BTU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.34 indicates BTU has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. BTU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on BTU?

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 BTU snapshot

As of June 30, 2026, spot at $22.78, ATM IV 60.11%, IV rank 37.17%, expected move 17.23%. The strangle on BTU 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 31-day expiry.

Why this strangle structure on BTU specifically: BTU IV at 60.11% 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 17.23% (roughly $3.93 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BTU expiries trade a higher absolute premium for lower per-day decay. Position sizing on BTU should anchor to the underlying notional of $22.78 per share and to the trader's directional view on BTU stock.

BTU strangle setup

The BTU 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 BTU near $22.78, the first option leg uses a $24.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BTU chain at a 31-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 BTU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$24.00	$1.07
Buy 1	Put	$22.00	$1.27

BTU strangle risk and reward

Net Premium / Debit: -$233.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$233.50
Breakeven(s): $19.67, $26.34
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.

BTU strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on BTU. 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%	+$1,965.50
$5.05	-77.9%	+$1,461.93
$10.08	-55.7%	+$958.36
$15.12	-33.6%	+$454.80
$20.15	-11.5%	-$48.77
$25.19	+10.6%	-$114.66
$30.22	+32.7%	+$388.91
$35.26	+54.8%	+$892.47
$40.30	+76.9%	+$1,396.04
$45.33	+99.0%	+$1,899.61

When traders use strangle on BTU

Strangles on BTU 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 BTU chain.

BTU thesis for this strangle

The market-implied 1-standard-deviation range for BTU extends from approximately $18.85 on the downside to $26.71 on the upside. A BTU 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 BTU IV rank near 37.17% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle thesis on BTU should anchor more to the directional view and the expected-move geometry. As a Energy name, BTU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BTU-specific events.

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

Frequently asked questions

What is a strangle on BTU?: A strangle on BTU is the strangle strategy applied to BTU (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 BTU stock trading near $22.78, the strikes shown on this page are snapped to the nearest listed BTU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are BTU 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 BTU strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 60.11%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$233.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BTU strangle?: The breakeven for the BTU strangle priced on this page is roughly $19.67 and $26.34 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 BTU market-implied 1-standard-deviation expected move is approximately 17.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on BTU?: Strangles on BTU 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 BTU chain.
How does current BTU implied volatility affect this strangle?: BTU ATM IV is at 60.11% with IV rank near 37.17%, 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.