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 42.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,775.00 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 $252.25 and $317.75 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 12.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current HEI implied volatility affect this strangle?

HEI ATM IV is at 42.40% with IV rank near 82.74%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

HEI Strangle Strategy

HEI (HEICO Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company's Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, subcomponents, and other instruments utilized on military aircraft. Its Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and RFI shielding and suppression filters; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; three-dimensional microelectronic and stacked memory products; harsh environment connectivity products and custom molded cable assemblies; radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors. The company serves customers primarily in the aviation, defense, space, medical, telecommunications, and electronics industries.

HEI (HEICO Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $40.61B, a trailing P/E of 57.07, a beta of 0.95 versus the broader market, a 52-week range of 256.11-361.69, average daily share volume of 727K, 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 0.95 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 57.07 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 May 15, 2026, spot at $288.65, ATM IV 42.40%, IV rank 82.74%, expected move 12.16%. 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 34-day expiry.

Why this strangle structure on HEI specifically: HEI IV at 42.40% is rich versus its 1-year range, which makes a premium-buying HEI strangle relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 12.16% (roughly $35.09 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 HEI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HEI should anchor to the underlying notional of $288.65 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 $288.65, the first option leg uses a $300.00 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 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 HEI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$300.00	$10.65
Buy 1	Put	$270.00	$7.10

HEI strangle risk and reward

Net Premium / Debit: -$1,775.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$1,775.00
Breakeven(s): $252.25, $317.75
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%	+$25,224.00
$63.83	-77.9%	+$18,841.90
$127.65	-55.8%	+$12,459.80
$191.47	-33.7%	+$6,077.70
$255.29	-11.6%	-$304.40
$319.12	+10.6%	+$136.50
$382.94	+32.7%	+$6,518.60
$446.76	+54.8%	+$12,900.70
$510.58	+76.9%	+$19,282.80
$574.40	+99.0%	+$25,664.90

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 $253.56 on the downside to $323.74 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 82.74% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on HEI at 42.40%. 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 $288.65, 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 42.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,775.00 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 $252.25 and $317.75 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 12.16%; 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 42.40% with IV rank near 82.74%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.