How are FANG 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 FANG strangle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$842.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a FANG strangle?

The breakeven for the FANG strangle priced on this page is roughly $181.58 and $218.43 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FANG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current FANG implied volatility affect this strangle?

FANG ATM IV is at 32.50% with IV rank near 24.55%, 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.

FANG Strangle Strategy

FANG (Diamondback Energy, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NASDAQ.

Diamondback Energy, Inc. operates as an independent enterprise focused on oil and natural gas. Its core business involves the acquisition, development, exploration, and production of unconventional and onshore hydrocarbon reserves, predominantly located within the Permian Basin across West Texas and New Mexico. The company's development efforts primarily target significant geological formations, including the Spraberry and Wolfcamp in the Midland Basin, as well as the Wolfcamp and Bone Spring within the Delaware Basin – both crucial components of the broader Permian. As of December 31, 2021, Diamondback Energy's asset base included approximately 524,700 gross acres under its control in the Permian Basin. At that time, its estimated proved oil and natural gas reserves amounted to 1,788,991 thousand barrels of crude oil equivalent. The company also maintained working interests in 5,289 gross producing wells and held royalty interests in an additional 6,455 wells.

FANG (Diamondback Energy, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $56.50B, a trailing P/E of 35.61, a beta of 0.42 versus the broader market, a 52-week range of 134.3-214.51, average daily share volume of 2.5M, a public-listing history dating back to 2012, approximately 2K full-time employees. These structural characteristics shape how FANG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.42 indicates FANG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 35.61 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. FANG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on FANG?

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.

FANG snapshot

As of August 14, 2026, spot at $202.45, ATM IV 32.50%, IV rank 24.55%, expected move 9.32%. The strangle on FANG below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this strangle structure on FANG specifically: FANG IV at 32.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a FANG strangle, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $18.86 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FANG expiries trade a higher absolute premium for lower per-day decay. Position sizing on FANG should anchor to the underlying notional of $202.45 per share and to the trader's directional view on FANG stock.

FANG strangle setup

The FANG strangle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FANG at $202.45 on that close, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FANG chain at a 35-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 FANG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$210.00	$5.20
Buy 1	Put	$190.00	$3.23

FANG strangle risk and reward

Net Premium / Debit: -$842.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$842.50
Breakeven(s): $181.58, $218.43
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.

FANG strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on FANG. 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%	+$18,156.50
$44.77	-77.9%	+$13,680.33
$89.53	-55.8%	+$9,204.16
$134.30	-33.7%	+$4,727.99
$179.06	-11.6%	+$251.82
$223.82	+10.6%	+$539.35
$268.58	+32.7%	+$5,015.53
$313.34	+54.8%	+$9,491.70
$358.10	+76.9%	+$13,967.87
$402.87	+99.0%	+$18,444.04

When traders use strangle on FANG

Strangles on FANG 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 FANG chain.

FANG thesis for this strangle

The market-implied 1-standard-deviation range for FANG extends from approximately $183.59 on the downside to $221.31 on the upside. A FANG 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 FANG IV rank near 24.55% 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 FANG at 32.50%. As a Energy name, FANG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FANG-specific events.

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

Frequently asked questions

What is a strangle on FANG?: A strangle on FANG is the strangle strategy applied to FANG (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 FANG stock at $202.45 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FANG chain strike and the premiums come straight from that session's bid/ask midpoint.
How are FANG 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 FANG strangle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$842.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a FANG strangle?: The breakeven for the FANG strangle priced on this page is roughly $181.58 and $218.43 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FANG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on FANG?: Strangles on FANG 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 FANG chain.
How does current FANG implied volatility affect this strangle?: FANG ATM IV is at 32.50% with IV rank near 24.55%, 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.