How are CVCO 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 CVCO strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 50.70%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$3,990.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CVCO strangle?

The breakeven for the CVCO strangle priced on this page is roughly $400.10 and $519.90 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 CVCO market-implied 1-standard-deviation expected move is approximately 14.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CVCO implied volatility affect this strangle?

CVCO ATM IV is at 50.70% with IV rank near 89.51%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

CVCO Strangle Strategy

CVCO (Cavco Industries, Inc.), in the Consumer Cyclical sector, (Residential Construction industry), listed on NASDAQ.

Cavco Industries, Inc. designs, produces, and retails manufactured homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its manufactured homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, and MidCountry brands. It also builds park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers.

CVCO (Cavco Industries, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $3.59B, a trailing P/E of 19.79, a beta of 1.31 versus the broader market, a 52-week range of 393.53-713.01, average daily share volume of 155K, a public-listing history dating back to 2003, approximately 7K full-time employees. These structural characteristics shape how CVCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.31 indicates CVCO 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 CVCO?

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 CVCO snapshot

As of May 15, 2026, spot at $460.47, ATM IV 50.70%, IV rank 89.51%, expected move 14.54%. The strangle on CVCO 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 CVCO specifically: CVCO IV at 50.70% is rich versus its 1-year range, which makes a premium-buying CVCO strangle relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 14.54% (roughly $66.93 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 CVCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on CVCO should anchor to the underlying notional of $460.47 per share and to the trader's directional view on CVCO stock.

CVCO strangle setup

The CVCO 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 CVCO near $460.47, the first option leg uses a $480.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CVCO 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 CVCO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$480.00	$20.45
Buy 1	Put	$440.00	$19.45

CVCO strangle risk and reward

Net Premium / Debit: -$3,990.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$3,990.00
Breakeven(s): $400.10, $519.90
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.

CVCO strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on CVCO. 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%	+$40,009.00
$101.82	-77.9%	+$29,827.86
$203.63	-55.8%	+$19,646.73
$305.44	-33.7%	+$9,465.59
$407.26	-11.6%	-$715.54
$509.07	+10.6%	-$1,083.32
$610.88	+32.7%	+$9,097.81
$712.69	+54.8%	+$19,278.95
$814.50	+76.9%	+$29,460.09
$916.31	+99.0%	+$39,641.22

When traders use strangle on CVCO

Strangles on CVCO 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 CVCO chain.

CVCO thesis for this strangle

The market-implied 1-standard-deviation range for CVCO extends from approximately $393.54 on the downside to $527.40 on the upside. A CVCO 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 CVCO IV rank near 89.51% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on CVCO at 50.70%. As a Consumer Cyclical name, CVCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CVCO-specific events.

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

Frequently asked questions

What is a strangle on CVCO?: A strangle on CVCO is the strangle strategy applied to CVCO (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 CVCO stock trading near $460.47, the strikes shown on this page are snapped to the nearest listed CVCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CVCO 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 CVCO strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 50.70%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$3,990.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CVCO strangle?: The breakeven for the CVCO strangle priced on this page is roughly $400.10 and $519.90 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 CVCO market-implied 1-standard-deviation expected move is approximately 14.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on CVCO?: Strangles on CVCO 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 CVCO chain.
How does current CVCO implied volatility affect this strangle?: CVCO ATM IV is at 50.70% with IV rank near 89.51%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.