CTOS Strangle Strategy
CTOS (Custom Truck One Source, Inc.), in the Industrials sector, (Rental & Leasing Services industry), listed on NYSE.
Custom Truck One Source, Inc. (CTOS) specializes in providing comprehensive services for specialty equipment across North America, serving crucial industries such as electric utility (transmission and distribution), telecommunications, rail, and other infrastructure development sectors. The company's operations are structured into three primary segments: Equipment Rental Solutions, Truck and Equipment Sales, and Aftermarket Parts and Services. Within its Equipment Rental Solutions division, CTOS offers access to a wide array of new and pre-owned specialized machinery for hire, including truck-mounted aerial lifts, various types of cranes, service vehicles, dump trucks, trailers, and digger derricks. The Truck and Equipment Sales segment focuses on the direct sale of new equipment, which can be extensively customized to meet the specific demands of its diverse clientele. Furthermore, the Aftermarket Parts and Services segment ensures ongoing support through equipment maintenance and repair services, along with the provision of specialized replacement parts. Originally founded in 1988 as Nesco Holdings, Inc., the company officially changed its name to Custom Truck One Source, Inc. in April 2021 and maintains its corporate headquarters in Kansas City, Missouri.
CTOS (Custom Truck One Source, Inc.) trades in the Industrials sector, specifically Rental & Leasing Services, with a market capitalization of approximately $2.72B, a beta of 1.39 versus the broader market, a 52-week range of 4.84-12.23, average daily share volume of 1.0M, a public-listing history dating back to 2017, approximately 3K full-time employees. These structural characteristics shape how CTOS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.39 indicates CTOS has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a strangle on CTOS?
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 CTOS snapshot
As of June 29, 2026, spot at $11.91, ATM IV 51.10%, IV rank 8.68%, expected move 14.65%. The strangle on CTOS 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 18-day expiry.
Why this strangle structure on CTOS specifically: CTOS IV at 51.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a CTOS strangle, with a market-implied 1-standard-deviation move of approximately 14.65% (roughly $1.74 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CTOS expiries trade a higher absolute premium for lower per-day decay. Position sizing on CTOS should anchor to the underlying notional of $11.91 per share and to the trader's directional view on CTOS stock.
CTOS strangle setup
The CTOS 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 CTOS near $11.91, the first option leg uses a $12.51 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CTOS chain at a 18-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 CTOS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $12.51 | N/A |
| Buy 1 | Put | $11.31 | N/A |
CTOS strangle risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
CTOS strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on CTOS. 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.
When traders use strangle on CTOS
Strangles on CTOS 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 CTOS chain.
CTOS thesis for this strangle
The market-implied 1-standard-deviation range for CTOS extends from approximately $10.17 on the downside to $13.65 on the upside. A CTOS 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 CTOS IV rank near 8.68% 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 CTOS at 51.10%. As a Industrials name, CTOS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CTOS-specific events.
CTOS 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. CTOS positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CTOS alongside the broader basket even when CTOS-specific fundamentals are unchanged. Always rebuild the position from current CTOS chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on CTOS?
- A strangle on CTOS is the strangle strategy applied to CTOS (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 CTOS stock trading near $11.91, the strikes shown on this page are snapped to the nearest listed CTOS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CTOS 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 CTOS strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 51.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CTOS strangle?
- The breakeven for the CTOS strangle priced on this page is no defined breakeven on the modeled curve 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 CTOS market-implied 1-standard-deviation expected move is approximately 14.65%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on CTOS?
- Strangles on CTOS 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 CTOS chain.
- How does current CTOS implied volatility affect this strangle?
- CTOS ATM IV is at 51.10% with IV rank near 8.68%, 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.