HEI Strangle Strategy
HEI (HEICO Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
HEICO Corporation operates as a global enterprise through its various subsidiaries, specializing in the design, manufacturing, and distribution of an extensive range of products and services tailored for the aerospace, defense, and electronics industries. The company's Flight Support Group (FSG) division is a principal supplier of essential replacement components for jet engines and aircraft. Its offerings include specialized thermal insulation products, such as blankets and reusable systems, along with a variety of bespoke parts. The FSG also serves as a distributor for a wide array of hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components, primarily targeting the commercial, regional, and general aviation sectors. Additionally, this segment provides comprehensive repair and overhaul services, covering jet engine and aircraft parts, avionics, instruments, composites, and flight surfaces for commercial aircraft, as well as navigation systems and various instruments used in military planes. HEICO's Electronic Technologies Group (ETG) delivers a broad and sophisticated portfolio of electronic solutions.
HEI (HEICO Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $48.09B, a trailing P/E of 60.97, a beta of 1.04 versus the broader market, a 52-week range of 256.11-361.69, average daily share volume of 688K, a public-listing history dating back to 1980, approximately 10K full-time employees. These structural characteristics shape how HEI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.04 places HEI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 60.97 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. HEI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on HEI?
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 HEI snapshot
As of June 29, 2026, spot at $350.07, ATM IV 33.10%, IV rank 47.63%, expected move 9.49%. The strangle on HEI 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 strangle structure on HEI specifically: HEI IV at 33.10% 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 9.49% (roughly $33.22 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 HEI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HEI should anchor to the underlying notional of $350.07 per share and to the trader's directional view on HEI stock.
HEI strangle setup
The HEI 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 HEI near $350.07, the first option leg uses a $370.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HEI 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 HEI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $370.00 | $3.13 |
| Buy 1 | Put | $330.00 | $3.38 |
HEI strangle risk and reward
- Net Premium / Debit
- -$650.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$650.00
- Breakeven(s)
- $323.50, $376.50
- 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.
HEI strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on HEI. 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% | +$32,349.00 |
| $77.41 | -77.9% | +$24,608.87 |
| $154.81 | -55.8% | +$16,868.74 |
| $232.21 | -33.7% | +$9,128.61 |
| $309.62 | -11.6% | +$1,388.48 |
| $387.02 | +10.6% | +$1,051.65 |
| $464.42 | +32.7% | +$8,791.78 |
| $541.82 | +54.8% | +$16,531.91 |
| $619.22 | +76.9% | +$24,272.05 |
| $696.62 | +99.0% | +$32,012.18 |
When traders use strangle on HEI
Strangles on HEI 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 HEI chain.
HEI thesis for this strangle
The market-implied 1-standard-deviation range for HEI extends from approximately $316.85 on the downside to $383.29 on the upside. A HEI 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 HEI IV rank near 47.63% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle thesis on HEI should anchor more to the directional view and the expected-move geometry. As a Industrials name, HEI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HEI-specific events.
HEI 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. HEI positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HEI alongside the broader basket even when HEI-specific fundamentals are unchanged. Always rebuild the position from current HEI chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on HEI?
- A strangle on HEI is the strangle strategy applied to HEI (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 HEI stock trading near $350.07, the strikes shown on this page are snapped to the nearest listed HEI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HEI 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 HEI strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 33.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$650.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HEI strangle?
- The breakeven for the HEI strangle priced on this page is roughly $323.50 and $376.50 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 HEI market-implied 1-standard-deviation expected move is approximately 9.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on HEI?
- Strangles on HEI 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 HEI chain.
- How does current HEI implied volatility affect this strangle?
- HEI ATM IV is at 33.10% with IV rank near 47.63%, 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.