How are DAC 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 DAC strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 27.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$140.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a DAC strangle?

The breakeven for the DAC strangle priced on this page is roughly $113.60 and $131.40 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 DAC market-implied 1-standard-deviation expected move is approximately 7.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current DAC implied volatility affect this strangle?

DAC ATM IV is at 27.10% with IV rank near 38.42%, 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.

DAC Strangle Strategy

DAC (Danaos Corporation), in the Industrials sector, (Marine Shipping industry), listed on NYSE.

Danaos Corporation, operating through its subsidiaries, specializes in the ownership and management of containerships across key global markets including Australia, Asia, Europe, and the United States. The company's core business involves providing essential seaborne transportation by chartering its vessels to various international liner companies. As of February 28, 2022, its fleet consisted of 71 containerships, offering a combined capacity of 436,589 twenty-foot equivalent units. Originally founded in 1963 and headquartered in Piraeus, Greece, the company was known as Danaos Holdings Limited until it officially adopted the name Danaos Corporation in October 2005.

DAC (Danaos Corporation) trades in the Industrials sector, specifically Marine Shipping, with a market capitalization of approximately $2.24B, a trailing P/E of 4.31, a beta of 0.88 versus the broader market, a 52-week range of 83.56-135.21, average daily share volume of 85K, a public-listing history dating back to 2006, approximately 4 full-time employees. These structural characteristics shape how DAC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.88 places DAC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 4.31 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. DAC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on DAC?

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 DAC snapshot

As of June 30, 2026, spot at $121.74, ATM IV 27.10%, IV rank 38.42%, expected move 7.77%. The strangle on DAC 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 17-day expiry.

Why this strangle structure on DAC specifically: DAC IV at 27.10% 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 7.77% (roughly $9.46 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DAC expiries trade a higher absolute premium for lower per-day decay. Position sizing on DAC should anchor to the underlying notional of $121.74 per share and to the trader's directional view on DAC stock.

DAC strangle setup

The DAC 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 DAC near $121.74, 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 DAC chain at a 17-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 DAC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$130.00	$0.65
Buy 1	Put	$115.00	$0.75

DAC strangle risk and reward

Net Premium / Debit: -$140.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$140.00
Breakeven(s): $113.60, $131.40
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.

DAC strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on DAC. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	+$11,359.00
$26.93	-77.9%	+$8,667.37
$53.84	-55.8%	+$5,975.74
$80.76	-33.7%	+$3,284.12
$107.68	-11.6%	+$592.49
$134.59	+10.6%	+$319.14
$161.51	+32.7%	+$3,010.77
$188.42	+54.8%	+$5,702.40
$215.34	+76.9%	+$8,394.03
$242.26	+99.0%	+$11,085.65

When traders use strangle on DAC

Strangles on DAC 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 DAC chain.

DAC thesis for this strangle

The market-implied 1-standard-deviation range for DAC extends from approximately $112.28 on the downside to $131.20 on the upside. A DAC 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 DAC IV rank near 38.42% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle thesis on DAC should anchor more to the directional view and the expected-move geometry. As a Industrials name, DAC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DAC-specific events.

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

Frequently asked questions

What is a strangle on DAC?: A strangle on DAC is the strangle strategy applied to DAC (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 DAC stock trading near $121.74, the strikes shown on this page are snapped to the nearest listed DAC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are DAC 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 DAC strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 27.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$140.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a DAC strangle?: The breakeven for the DAC strangle priced on this page is roughly $113.60 and $131.40 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 DAC market-implied 1-standard-deviation expected move is approximately 7.77%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on DAC?: Strangles on DAC 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 DAC chain.
How does current DAC implied volatility affect this strangle?: DAC ATM IV is at 27.10% with IV rank near 38.42%, 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.