How are CAH 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 CAH strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 26.82%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$470.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CAH strangle?

The breakeven for the CAH strangle priced on this page is roughly $180.30 and $209.70 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 7.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CAH implied volatility affect this strangle?

CAH ATM IV is at 26.82% with IV rank near 39.05%, 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.

CAH Strangle Strategy

CAH (Cardinal Health, Inc.), in the Healthcare sector, (Medical - Distribution industry), listed on NYSE.

Cardinal Health, Inc. operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and offers medication therapy management and patient outcomes services to hospitals, other healthcare providers, and payers, as well as provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines.

CAH (Cardinal Health, Inc.) trades in the Healthcare sector, specifically Medical - Distribution, with a market capitalization of approximately $43.64B, a trailing P/E of 28.09, a beta of 0.54 versus the broader market, a 52-week range of 137.75-233.6, average daily share volume of 1.8M, 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 0.54 indicates CAH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CAH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on CAH?

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 CAH snapshot

As of May 15, 2026, spot at $196.19, ATM IV 26.82%, IV rank 39.05%, expected move 7.69%. The strangle 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 28-day expiry.

Why this strangle structure on CAH specifically: CAH IV at 26.82% 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 7.69% (roughly $15.08 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 CAH expiries trade a higher absolute premium for lower per-day decay. Position sizing on CAH should anchor to the underlying notional of $196.19 per share and to the trader's directional view on CAH stock.

CAH strangle setup

The CAH 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 CAH near $196.19, the first option leg uses a $205.00 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 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 CAH shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$205.00	$2.60
Buy 1	Put	$185.00	$2.10

CAH strangle risk and reward

Net Premium / Debit: -$470.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$470.00
Breakeven(s): $180.30, $209.70
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.

CAH strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle 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%	+$18,029.00
$43.39	-77.9%	+$13,691.24
$86.77	-55.8%	+$9,353.48
$130.14	-33.7%	+$5,015.72
$173.52	-11.6%	+$677.96
$216.90	+10.6%	+$719.79
$260.28	+32.7%	+$5,057.55
$303.65	+54.8%	+$9,395.31
$347.03	+76.9%	+$13,733.07
$390.41	+99.0%	+$18,070.83

When traders use strangle on CAH

Strangles on CAH 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 CAH chain.

CAH thesis for this strangle

The market-implied 1-standard-deviation range for CAH extends from approximately $181.11 on the downside to $211.27 on the upside. A CAH 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 CAH IV rank near 39.05% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle 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 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. 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. Always rebuild the position from current CAH chain quotes before placing a trade.

Frequently asked questions

What is a strangle on CAH?: A strangle on CAH is the strangle strategy applied to CAH (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 CAH stock trading near $196.19, 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 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 CAH strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 26.82%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$470.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CAH strangle?: The breakeven for the CAH strangle priced on this page is roughly $180.30 and $209.70 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 7.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on CAH?: Strangles on CAH 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 CAH chain.
How does current CAH implied volatility affect this strangle?: CAH ATM IV is at 26.82% with IV rank near 39.05%, 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.