EPAC Strangle Strategy
EPAC (Enerpac Tool Group Corp.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Enerpac Tool Group Corp. manufactures and sells a range of industrial products and solutions in the United States, the United Kingdom, Germany, Australia, Canada, China, Saudi Arabia, Brazil, and internationally. It operates in two segments, Industrial Tools & Services (IT&S) and Other. The IT&S segment designs, manufactures, and distributes branded hydraulic and mechanical tools; and provides services and tool rentals to the infrastructure, industrial maintenance, repair and operations, oil and gas, mining, renewable energy, and construction markets. It also offers branded tools and engineered heavy lifting technology solutions, and hydraulic torque wrenches; maintenance and manpower services; high-force hydraulic and mechanical tools, including cylinders, pumps, valves, and specialty tools; and bolt tensioners and other miscellaneous products. This segment markets its branded tools and services primarily under the Enerpac, Hydratight, Larzep, and Simplex brands. The Other segment designs and manufactures synthetic ropes and biomedical textiles.
EPAC (Enerpac Tool Group Corp.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $1.80B, a trailing P/E of 20.90, a beta of 0.89 versus the broader market, a 52-week range of 33.66-45.96, average daily share volume of 394K, a public-listing history dating back to 2000, approximately 2K full-time employees. These structural characteristics shape how EPAC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.89 places EPAC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. EPAC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on EPAC?
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 EPAC snapshot
As of May 15, 2026, spot at $33.84, ATM IV 63.80%, IV rank 13.37%, expected move 18.29%. The strangle on EPAC 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 EPAC specifically: EPAC IV at 63.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a EPAC strangle, with a market-implied 1-standard-deviation move of approximately 18.29% (roughly $6.19 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 EPAC expiries trade a higher absolute premium for lower per-day decay. Position sizing on EPAC should anchor to the underlying notional of $33.84 per share and to the trader's directional view on EPAC stock.
EPAC strangle setup
The EPAC 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 EPAC near $33.84, the first option leg uses a $35.53 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EPAC 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 EPAC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $35.53 | N/A |
| Buy 1 | Put | $32.15 | N/A |
EPAC 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.
EPAC strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on EPAC. 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 EPAC
Strangles on EPAC 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 EPAC chain.
EPAC thesis for this strangle
The market-implied 1-standard-deviation range for EPAC extends from approximately $27.65 on the downside to $40.03 on the upside. A EPAC 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 EPAC IV rank near 13.37% 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 EPAC at 63.80%. As a Industrials name, EPAC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EPAC-specific events.
EPAC 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. EPAC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EPAC alongside the broader basket even when EPAC-specific fundamentals are unchanged. Always rebuild the position from current EPAC chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on EPAC?
- A strangle on EPAC is the strangle strategy applied to EPAC (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 EPAC stock trading near $33.84, the strikes shown on this page are snapped to the nearest listed EPAC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EPAC 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 EPAC strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 63.80%), 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 EPAC strangle?
- The breakeven for the EPAC 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 EPAC market-implied 1-standard-deviation expected move is approximately 18.29%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on EPAC?
- Strangles on EPAC 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 EPAC chain.
- How does current EPAC implied volatility affect this strangle?
- EPAC ATM IV is at 63.80% with IV rank near 13.37%, 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.