HPP Strangle Strategy
HPP (Hudson Pacific Properties, Inc.), in the Real Estate sector, (REIT - Office industry), listed on NYSE.
Hudson Pacific is a real estate investment trust with a portfolio of office and studio properties totaling nearly 19 million square feet, including land for development. Focused on premier West Coast epicenters of innovation, media and technology, its anchor tenants include Fortune 500 and leading growth companies such as Netflix, Google, Square, Uber, NFL Enterprises and more. Hudson Pacific is publicly traded on the NYSE under the symbol HPP, and listed as a component of the S&P MidCap 400 Index.
HPP (Hudson Pacific Properties, Inc.) trades in the Real Estate sector, specifically REIT - Office, with a market capitalization of approximately $629.2M, a beta of 1.88 versus the broader market, a 52-week range of 5.26-21.7, average daily share volume of 1.3M, a public-listing history dating back to 2010, approximately 740 full-time employees. These structural characteristics shape how HPP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.88 indicates HPP has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. HPP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on HPP?
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 HPP snapshot
As of May 15, 2026, spot at $11.41, ATM IV 91.20%, IV rank 23.93%, expected move 26.15%. The strangle on HPP 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 HPP specifically: HPP IV at 91.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a HPP strangle, with a market-implied 1-standard-deviation move of approximately 26.15% (roughly $2.98 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 HPP expiries trade a higher absolute premium for lower per-day decay. Position sizing on HPP should anchor to the underlying notional of $11.41 per share and to the trader's directional view on HPP stock.
HPP strangle setup
The HPP 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 HPP near $11.41, the first option leg uses a $11.98 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HPP 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 HPP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $11.98 | N/A |
| Buy 1 | Put | $10.84 | N/A |
HPP 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.
HPP strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on HPP. 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 HPP
Strangles on HPP 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 HPP chain.
HPP thesis for this strangle
The market-implied 1-standard-deviation range for HPP extends from approximately $8.43 on the downside to $14.39 on the upside. A HPP 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 HPP IV rank near 23.93% 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 HPP at 91.20%. As a Real Estate name, HPP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HPP-specific events.
HPP 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. HPP positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HPP alongside the broader basket even when HPP-specific fundamentals are unchanged. Always rebuild the position from current HPP chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on HPP?
- A strangle on HPP is the strangle strategy applied to HPP (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 HPP stock trading near $11.41, the strikes shown on this page are snapped to the nearest listed HPP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HPP 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 HPP strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 91.20%), 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 HPP strangle?
- The breakeven for the HPP 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 HPP market-implied 1-standard-deviation expected move is approximately 26.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on HPP?
- Strangles on HPP 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 HPP chain.
- How does current HPP implied volatility affect this strangle?
- HPP ATM IV is at 91.20% with IV rank near 23.93%, 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.