KMX Iron Condor Strategy
KMX (CarMax, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
CarMax, Inc., together with its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates through two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; and extended protection plans to customers at the time of sale, as well as sells vehicles that are approximately 10 years old and has more than 100,000 miles through wholesale auctions. The company also provides reconditioning and vehicle repair services; and financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with various financial institutions. As of February 28, 2022, it operated approximately 230 used car stores. CarMax, Inc. was founded in 1993 and is based in Richmond, Virginia.
KMX (CarMax, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $5.26B, a trailing P/E of 22.07, a beta of 1.18 versus the broader market, a 52-week range of 30.26-71.99, average daily share volume of 3.3M, a public-listing history dating back to 1997, approximately 30K full-time employees. These structural characteristics shape how KMX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.18 places KMX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a iron condor on KMX?
An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes.
Current KMX snapshot
As of May 15, 2026, spot at $37.01, ATM IV 68.00%, IV rank 61.50%, expected move 19.50%. The iron condor on KMX 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 63-day expiry.
Why this iron condor structure on KMX specifically: KMX IV at 68.00% is mid-range versus its 1-year history, so the credit collected on a KMX iron condor sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 19.50% (roughly $7.22 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KMX expiries trade a higher absolute premium for lower per-day decay. Position sizing on KMX should anchor to the underlying notional of $37.01 per share and to the trader's directional view on KMX stock.
KMX iron condor setup
The KMX iron condor below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With KMX near $37.01, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KMX chain at a 63-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 KMX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Call | $40.00 | $2.48 |
| Buy 1 | Call | $40.00 | $2.48 |
| Sell 1 | Put | $35.00 | $2.60 |
| Buy 1 | Put | $32.50 | $1.60 |
KMX iron condor risk and reward
- Net Premium / Debit
- +$100.00
- Max Profit (per contract)
- $100.00
- Max Loss (per contract)
- -$150.00
- Breakeven(s)
- $34.00
- Risk / Reward Ratio
- 0.667
Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit.
KMX iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor on KMX. 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% | -$150.00 |
| $8.19 | -77.9% | -$150.00 |
| $16.37 | -55.8% | -$150.00 |
| $24.56 | -33.7% | -$150.00 |
| $32.74 | -11.5% | -$126.20 |
| $40.92 | +10.6% | +$100.00 |
| $49.10 | +32.7% | +$100.00 |
| $57.28 | +54.8% | +$100.00 |
| $65.47 | +76.9% | +$100.00 |
| $73.65 | +99.0% | +$100.00 |
When traders use iron condor on KMX
Iron condors on KMX are a delta-neutral premium-collection structure that profits if KMX stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
KMX thesis for this iron condor
The market-implied 1-standard-deviation range for KMX extends from approximately $29.79 on the downside to $44.23 on the upside. A KMX iron condor is a delta-neutral premium-collection structure that pays off when KMX stays inside the inner short strikes through expiration; the wing width should reflect the trader's tolerance for the maximum loss scenario where the underlying breaches an outer strike. Current KMX IV rank near 61.50% is mid-range against its 1-year distribution, so the IV signal is neutral; the iron condor thesis on KMX should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, KMX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KMX-specific events.
KMX iron condor positions are structurally neutral / range-bound; 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. KMX positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KMX alongside the broader basket even when KMX-specific fundamentals are unchanged. Short-premium structures like a iron condor on KMX carry tail risk when realized volatility exceeds the implied move; review historical KMX earnings reactions and macro stress periods before sizing. Always rebuild the position from current KMX chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on KMX?
- A iron condor on KMX is the iron condor strategy applied to KMX (stock). The strategy is structurally neutral / range-bound: An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes. With KMX stock trading near $37.01, the strikes shown on this page are snapped to the nearest listed KMX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KMX iron condor max profit and max loss calculated?
- Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit. For the KMX iron condor priced from the end-of-day chain at a 30-day expiry (ATM IV 68.00%), the computed maximum profit is $100.00 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KMX iron condor?
- The breakeven for the KMX iron condor priced on this page is roughly $34.00 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 KMX market-implied 1-standard-deviation expected move is approximately 19.50%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a iron condor on KMX?
- Iron condors on KMX are a delta-neutral premium-collection structure that profits if KMX stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current KMX implied volatility affect this iron condor?
- KMX ATM IV is at 68.00% with IV rank near 61.50%, 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.