CTS Strangle Strategy
CTS (CTS Corporation), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NYSE.
CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides sensors and actuators for use in passenger or commercial vehicles; connectivity components for telecommunications infrastructure, information technology, and other high-speed applications; switches, temperature sensors, and potentiometers supplied to multiple markets; and fabricated piezoelectric materials and substrates used primarily in medical, industrial, aerospace and defense, and information technology markets. In addition, the company sells and markets its products through its sales engineers, independent manufacturers' representatives, and distributors. CTS Corporation was founded in 1896 and is headquartered in Lisle, Illinois.
CTS (CTS Corporation) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $1.70B, a trailing P/E of 24.68, a beta of 1.01 versus the broader market, a 52-week range of 36.03-62.02, average daily share volume of 231K, a public-listing history dating back to 1980, approximately 4K full-time employees. These structural characteristics shape how CTS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.01 places CTS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CTS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on CTS?
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 CTS snapshot
As of May 15, 2026, spot at $59.05, ATM IV 36.30%, IV rank 17.49%, expected move 10.41%. The strangle on CTS 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 CTS specifically: CTS IV at 36.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a CTS strangle, with a market-implied 1-standard-deviation move of approximately 10.41% (roughly $6.15 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 CTS expiries trade a higher absolute premium for lower per-day decay. Position sizing on CTS should anchor to the underlying notional of $59.05 per share and to the trader's directional view on CTS stock.
CTS strangle setup
The CTS 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 CTS near $59.05, the first option leg uses a $62.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CTS 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 CTS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $62.00 | N/A |
| Buy 1 | Put | $56.10 | N/A |
CTS 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.
CTS strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on CTS. 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 CTS
Strangles on CTS 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 CTS chain.
CTS thesis for this strangle
The market-implied 1-standard-deviation range for CTS extends from approximately $52.90 on the downside to $65.20 on the upside. A CTS 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 CTS IV rank near 17.49% 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 CTS at 36.30%. As a Technology name, CTS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CTS-specific events.
CTS 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. CTS positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CTS alongside the broader basket even when CTS-specific fundamentals are unchanged. Always rebuild the position from current CTS chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on CTS?
- A strangle on CTS is the strangle strategy applied to CTS (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 CTS stock trading near $59.05, the strikes shown on this page are snapped to the nearest listed CTS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CTS 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 CTS strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 36.30%), 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 CTS strangle?
- The breakeven for the CTS 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 CTS market-implied 1-standard-deviation expected move is approximately 10.41%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on CTS?
- Strangles on CTS 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 CTS chain.
- How does current CTS implied volatility affect this strangle?
- CTS ATM IV is at 36.30% with IV rank near 17.49%, 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.