EAF Long Put Strategy
EAF (GrafTech International Ltd.), in the Industrials sector, (Electrical Equipment & Parts industry), listed on NYSE.
GrafTech International Ltd. is a global enterprise dedicated to the research, development, manufacturing, and sale of a diverse range of graphite and carbon-based solutions. The company's key offerings include graphite electrodes, which are crucial for the production of electric arc furnace steel and various other ferrous and non-ferrous metals. Additionally, it supplies petroleum needle coke, a specialized crystalline carbon compound integral to the fabrication of these graphite electrodes. GrafTech reaches its clientele through a multi-faceted sales approach, employing both its direct sales team and a network of independent representatives and distributors. The company, which was established in 1886, is headquartered in Brooklyn Heights, Ohio.
EAF (GrafTech International Ltd.) trades in the Industrials sector, specifically Electrical Equipment & Parts, with a market capitalization of approximately $187.5M, a beta of 1.79 versus the broader market, a 52-week range of 4.92-20.32, average daily share volume of 289K, a public-listing history dating back to 2018, approximately 1K full-time employees. These structural characteristics shape how EAF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.79 indicates EAF 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 long put on EAF?
A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration.
Current EAF snapshot
As of June 29, 2026, spot at $5.83, ATM IV 150.30%, IV rank 26.46%, expected move 43.09%. The long put on EAF 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 long put structure on EAF specifically: EAF IV at 150.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a EAF long put, with a market-implied 1-standard-deviation move of approximately 43.09% (roughly $2.51 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 EAF expiries trade a higher absolute premium for lower per-day decay. Position sizing on EAF should anchor to the underlying notional of $5.83 per share and to the trader's directional view on EAF stock.
EAF long put setup
The EAF long put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With EAF near $5.83, the first option leg uses a $6.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EAF 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 EAF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $6.00 | $0.81 |
EAF long put risk and reward
- Net Premium / Debit
- -$81.00
- Max Profit (per contract)
- $518.00
- Max Loss (per contract)
- -$81.00
- Breakeven(s)
- $5.19
- Risk / Reward Ratio
- 6.395
Max profit equals the strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium.
EAF long put payoff curve
Modeled P&L at expiration across a range of underlying prices for the long put on EAF. 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 | -99.8% | +$518.00 |
| $1.30 | -77.7% | +$389.21 |
| $2.59 | -55.6% | +$260.41 |
| $3.87 | -33.6% | +$131.62 |
| $5.16 | -11.5% | +$2.82 |
| $6.45 | +10.6% | -$81.00 |
| $7.74 | +32.7% | -$81.00 |
| $9.03 | +54.8% | -$81.00 |
| $10.31 | +76.9% | -$81.00 |
| $11.60 | +99.0% | -$81.00 |
When traders use long put on EAF
Long puts on EAF hedge an existing long EAF stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying EAF exposure being hedged.
EAF thesis for this long put
The market-implied 1-standard-deviation range for EAF extends from approximately $3.32 on the downside to $8.34 on the upside. A EAF long put expresses a directional view that the underlying closes below the strike minus premium at expiration, frequently sized to hedge an existing long EAF position with one put per 100 shares held. Current EAF IV rank near 26.46% 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 EAF at 150.30%. As a Industrials name, EAF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EAF-specific events.
EAF long put positions are structurally bearish; 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. EAF positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EAF alongside the broader basket even when EAF-specific fundamentals are unchanged. Long-premium structures like a long put on EAF are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current EAF chain quotes before placing a trade.
Frequently asked questions
- What is a long put on EAF?
- A long put on EAF is the long put strategy applied to EAF (stock). The strategy is structurally bearish: A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration. With EAF stock trading near $5.83, the strikes shown on this page are snapped to the nearest listed EAF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EAF long put max profit and max loss calculated?
- Max profit equals the strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium. For the EAF long put priced from the end-of-day chain at a 30-day expiry (ATM IV 150.30%), the computed maximum profit is $518.00 per contract and the computed maximum loss is -$81.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a EAF long put?
- The breakeven for the EAF long put priced on this page is roughly $5.19 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 EAF market-implied 1-standard-deviation expected move is approximately 43.09%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a long put on EAF?
- Long puts on EAF hedge an existing long EAF stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying EAF exposure being hedged.
- How does current EAF implied volatility affect this long put?
- EAF ATM IV is at 150.30% with IV rank near 26.46%, 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.