CAH Bear Put Spread Strategy
CAH (Cardinal Health, Inc.), in the Healthcare sector, (Medical - Distribution industry), listed on NYSE.
Cardinal Health, Inc. operates as a global, integrated provider of healthcare services and products, with its reach spanning the United States, Canada, Europe, Asia, and other international markets. The company delivers bespoke support to a diverse clientele, including hospitals, healthcare networks, pharmacies, outpatient surgical centers, clinical labs, physician practices, and individuals receiving care at home. It is structured into two core divisions: Pharmaceutical and Medical. The Pharmaceutical division oversees the distribution of a wide array of products, encompassing branded, generic, and specialty pharmaceuticals, along with over-the-counter health and consumer goods. This segment additionally offers specialized services to pharmaceutical manufacturers and healthcare providers, particularly for specialty pharmaceutical products. Its operations extend to managing nuclear pharmacies and facilities that produce radiopharmaceuticals.
CAH (Cardinal Health, Inc.) trades in the Healthcare sector, specifically Medical - Distribution, with a market capitalization of approximately $55.72B, a trailing P/E of 35.86, a beta of 0.53 versus the broader market, a 52-week range of 137.75-240.44, average daily share volume of 2.1M, a public-listing history dating back to 1983, approximately 58K full-time employees. These structural characteristics shape how CAH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.53 indicates CAH 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 35.86 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. CAH 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 CAH?
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 CAH snapshot
As of June 30, 2026, spot at $237.38, ATM IV 25.05%, IV rank 31.86%, expected move 7.18%. The bear put spread on CAH 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 bear put spread structure on CAH specifically: CAH IV at 25.05% 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 7.18% (roughly $17.05 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 CAH expiries trade a higher absolute premium for lower per-day decay. Position sizing on CAH should anchor to the underlying notional of $237.38 per share and to the trader's directional view on CAH stock.
CAH bear put spread setup
The CAH 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 CAH near $237.38, the first option leg uses a $235.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CAH 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 CAH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $235.00 | $5.50 |
| Sell 1 | Put | $225.00 | $2.60 |
CAH bear put spread risk and reward
- Net Premium / Debit
- -$290.00
- Max Profit (per contract)
- $710.00
- Max Loss (per contract)
- -$290.00
- Breakeven(s)
- $232.10
- Risk / Reward Ratio
- 2.448
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.
CAH bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on CAH. 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% | +$710.00 |
| $52.49 | -77.9% | +$710.00 |
| $104.98 | -55.8% | +$710.00 |
| $157.46 | -33.7% | +$710.00 |
| $209.95 | -11.6% | +$710.00 |
| $262.43 | +10.6% | -$290.00 |
| $314.92 | +32.7% | -$290.00 |
| $367.40 | +54.8% | -$290.00 |
| $419.89 | +76.9% | -$290.00 |
| $472.37 | +99.0% | -$290.00 |
When traders use bear put spread on CAH
Bear put spreads on CAH reduce the cost of a bearish CAH stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
CAH thesis for this bear put spread
The market-implied 1-standard-deviation range for CAH extends from approximately $220.33 on the downside to $254.43 on the upside. A CAH bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on CAH, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current CAH IV rank near 31.86% is mid-range against its 1-year distribution, so the IV signal is neutral; the bear put spread thesis on CAH should anchor more to the directional view and the expected-move geometry. As a Healthcare name, CAH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CAH-specific events.
CAH 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. CAH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CAH alongside the broader basket even when CAH-specific fundamentals are unchanged. Long-premium structures like a bear put spread on CAH 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 CAH chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on CAH?
- A bear put spread on CAH is the bear put spread strategy applied to CAH (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 CAH stock trading near $237.38, the strikes shown on this page are snapped to the nearest listed CAH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CAH 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 CAH bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 25.05%), the computed maximum profit is $710.00 per contract and the computed maximum loss is -$290.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CAH bear put spread?
- The breakeven for the CAH bear put spread priced on this page is roughly $232.10 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 CAH market-implied 1-standard-deviation expected move is approximately 7.18%; 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 CAH?
- Bear put spreads on CAH reduce the cost of a bearish CAH 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 CAH implied volatility affect this bear put spread?
- CAH ATM IV is at 25.05% with IV rank near 31.86%, 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.