How are CPK 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 CPK strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$319.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CPK strangle?

The breakeven for the CPK strangle priced on this page is roughly $116.81 and $133.20 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 CPK market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CPK implied volatility affect this strangle?

CPK ATM IV is at 21.90% with IV rank near 2.23%, 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.

CPK Strangle Strategy

CPK (Chesapeake Utilities Corporation), in the Utilities sector, (Regulated Gas industry), listed on NYSE.

Chesapeake Utilities Corporation operates as an energy delivery company. The company operates through two segments, Regulated Energy and Unregulated Energy. The Regulated Energy segment engages in the natural gas distribution operations in central and southern Delaware, Maryland's eastern shore, and Florida; regulated natural gas transmission in the Delmarva Peninsula and Florida; and regulated electric distribution in northeast and northwest Florida. The Unregulated Energy segment engages in the propane operations in the Mid-Atlantic region, North Carolina, South Carolina, and Florida; unregulated natural gas transmission/supply operation in central and eastern Ohio; generation of electricity and steam; and provision of compressed natural gas, liquefied natural gas, and renewable natural gas transportation and pipeline solutions primarily to utilities and pipelines in the eastern United States. This segment also provides other unregulated energy services, such as energy-related merchandise sales; heating, ventilation, and air conditioning services; and plumbing and electrical services. The company was founded in 1859 and is headquartered in Dover, Delaware.

CPK (Chesapeake Utilities Corporation) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $3.03B, a trailing P/E of 20.35, a beta of 0.72 versus the broader market, a 52-week range of 116.3-140.59, average daily share volume of 146K, a public-listing history dating back to 1980, approximately 1K full-time employees. These structural characteristics shape how CPK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.72 places CPK roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CPK pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on CPK?

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 CPK snapshot

As of May 15, 2026, spot at $124.95, ATM IV 21.90%, IV rank 2.23%, expected move 6.28%. The strangle on CPK 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 34-day expiry.

Why this strangle structure on CPK specifically: CPK IV at 21.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a CPK strangle, with a market-implied 1-standard-deviation move of approximately 6.28% (roughly $7.85 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CPK expiries trade a higher absolute premium for lower per-day decay. Position sizing on CPK should anchor to the underlying notional of $124.95 per share and to the trader's directional view on CPK stock.

CPK strangle setup

The CPK 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 CPK near $124.95, the first option leg uses a $130.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CPK chain at a 34-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 CPK shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$130.00	$1.57
Buy 1	Put	$120.00	$1.63

CPK strangle risk and reward

Net Premium / Debit: -$319.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$319.50
Breakeven(s): $116.81, $133.20
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.

CPK strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on CPK. 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%	+$11,679.50
$27.64	-77.9%	+$8,916.90
$55.26	-55.8%	+$6,154.29
$82.89	-33.7%	+$3,391.69
$110.51	-11.6%	+$629.09
$138.14	+10.6%	+$494.52
$165.77	+32.7%	+$3,257.12
$193.39	+54.8%	+$6,019.72
$221.02	+76.9%	+$8,782.32
$248.64	+99.0%	+$11,544.93

When traders use strangle on CPK

Strangles on CPK 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 CPK chain.

CPK thesis for this strangle

The market-implied 1-standard-deviation range for CPK extends from approximately $117.10 on the downside to $132.80 on the upside. A CPK 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 CPK IV rank near 2.23% 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 CPK at 21.90%. As a Utilities name, CPK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CPK-specific events.

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

Frequently asked questions

What is a strangle on CPK?: A strangle on CPK is the strangle strategy applied to CPK (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 CPK stock trading near $124.95, the strikes shown on this page are snapped to the nearest listed CPK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CPK 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 CPK strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 21.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$319.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CPK strangle?: The breakeven for the CPK strangle priced on this page is roughly $116.81 and $133.20 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 CPK market-implied 1-standard-deviation expected move is approximately 6.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on CPK?: Strangles on CPK 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 CPK chain.
How does current CPK implied volatility affect this strangle?: CPK ATM IV is at 21.90% with IV rank near 2.23%, 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.