LII Bear Put Spread Strategy
LII (Lennox International Inc.), in the Industrials sector, (Construction industry), listed on NYSE.
Lennox International Inc., together with its subsidiaries, designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. It operates through three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. The Residential Heating & Cooling segment provides furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment and accessories, comfort control products, and replacement parts and supplies for residential replacement and new construction markets. The Commercial Heating & Cooling segment offers unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, and variable refrigerant flow commercial products for light commercial markets. The Refrigeration segment offers condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, and refrigeration rack systems for preserving food and other perishables in supermarkets, convenience stores, restaurants, warehouses, and distribution centers, as well as for data centers, machine tooling, and other cooling applications; and compressor racks and industrial process chillers. The company sells its products and services through direct sales, distributors, and company-owned parts and supplies stores.
LII (Lennox International Inc.) trades in the Industrials sector, specifically Construction, with a market capitalization of approximately $17.66B, a trailing P/E of 22.55, a beta of 1.23 versus the broader market, a 52-week range of 434.06-689.44, average daily share volume of 466K, a public-listing history dating back to 1999, approximately 5K full-time employees. These structural characteristics shape how LII stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.23 places LII roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LII pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on LII?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current LII snapshot
As of May 15, 2026, spot at $500.14, ATM IV 37.20%, IV rank 42.31%, expected move 10.66%. The bear put spread on LII 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 bear put spread structure on LII specifically: LII IV at 37.20% 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 10.66% (roughly $53.34 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 LII expiries trade a higher absolute premium for lower per-day decay. Position sizing on LII should anchor to the underlying notional of $500.14 per share and to the trader's directional view on LII stock.
LII bear put spread setup
The LII bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With LII near $500.14, the first option leg uses a $500.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LII 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 LII shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $500.00 | $22.15 |
| Sell 1 | Put | $480.00 | $14.75 |
LII bear put spread risk and reward
- Net Premium / Debit
- -$740.00
- Max Profit (per contract)
- $1,260.00
- Max Loss (per contract)
- -$740.00
- Breakeven(s)
- $492.60
- Risk / Reward Ratio
- 1.703
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
LII bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on LII. 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% | +$1,260.00 |
| $110.59 | -77.9% | +$1,260.00 |
| $221.18 | -55.8% | +$1,260.00 |
| $331.76 | -33.7% | +$1,260.00 |
| $442.34 | -11.6% | +$1,260.00 |
| $552.92 | +10.6% | -$740.00 |
| $663.51 | +32.7% | -$740.00 |
| $774.09 | +54.8% | -$740.00 |
| $884.67 | +76.9% | -$740.00 |
| $995.25 | +99.0% | -$740.00 |
When traders use bear put spread on LII
Bear put spreads on LII reduce the cost of a bearish LII stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
LII thesis for this bear put spread
The market-implied 1-standard-deviation range for LII extends from approximately $446.80 on the downside to $553.48 on the upside. A LII bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on LII, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current LII IV rank near 42.31% is mid-range against its 1-year distribution, so the IV signal is neutral; the bear put spread thesis on LII should anchor more to the directional view and the expected-move geometry. As a Industrials name, LII options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LII-specific events.
LII bear put spread positions are structurally moderately bearish; 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. LII positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LII alongside the broader basket even when LII-specific fundamentals are unchanged. Long-premium structures like a bear put spread on LII are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current LII chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on LII?
- A bear put spread on LII is the bear put spread strategy applied to LII (stock). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With LII stock trading near $500.14, the strikes shown on this page are snapped to the nearest listed LII chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LII bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the LII bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 37.20%), the computed maximum profit is $1,260.00 per contract and the computed maximum loss is -$740.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LII bear put spread?
- The breakeven for the LII bear put spread priced on this page is roughly $492.60 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 LII market-implied 1-standard-deviation expected move is approximately 10.66%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on LII?
- Bear put spreads on LII reduce the cost of a bearish LII stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current LII implied volatility affect this bear put spread?
- LII ATM IV is at 37.20% with IV rank near 42.31%, 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.