LII Bear Put Spread Strategy
LII (Lennox International Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Lennox International Inc. is a global manufacturer and distributor specializing in heating, ventilation, air conditioning (HVAC), and refrigeration solutions. The company operates across three divisions: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Its Residential Heating & Cooling division supplies homeowners with systems like furnaces, air conditioners, and heat pumps, along with indoor air quality products, comfort controls, and replacement components, catering to both new construction and existing residential upgrades. The Commercial Heating & Cooling division serves the light commercial sector, providing unitary HVAC equipment, advanced applied systems, control technologies, and comprehensive installation and maintenance services, including variable refrigerant flow solutions. Lastly, the Refrigeration division delivers essential components such as condensing units, unit coolers, and industrial chillers. These are crucial for food preservation in retail, hospitality, and logistics (e.g., supermarkets, restaurants, warehouses), as well as for specialized cooling needs in data centers, machine tooling, and other industrial applications.
LII (Lennox International Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $14.55B, a trailing P/E of 18.86, a beta of 1.20 versus the broader market, a 52-week range of 411.41-616.5, average daily share volume of 477K, 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 1.20 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.
LII snapshot
As of August 14, 2026, spot at $421.44, ATM IV 34.10%, IV rank 34.35%, expected move 9.78%. The bear put spread on LII below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this bear put spread structure on LII specifically: LII IV at 34.10% 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 9.78% (roughly $41.20 on the underlying). The 35-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 $421.44 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 August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With LII at $421.44 on that close, the first option leg uses a $420.00 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 35-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 | $420.00 | $16.10 |
| Sell 1 | Put | $400.00 | $9.20 |
LII bear put spread risk and reward
- Net Premium / Debit
- -$690.00
- Max Profit (per contract)
- $1,310.00
- Max Loss (per contract)
- -$690.00
- Breakeven(s)
- $413.10
- Risk / Reward Ratio
- 1.899
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% | +$1,310.00 |
| $93.19 | -77.9% | +$1,310.00 |
| $186.37 | -55.8% | +$1,310.00 |
| $279.55 | -33.7% | +$1,310.00 |
| $372.74 | -11.6% | +$1,310.00 |
| $465.92 | +10.6% | -$690.00 |
| $559.10 | +32.7% | -$690.00 |
| $652.28 | +54.8% | -$690.00 |
| $745.46 | +76.9% | -$690.00 |
| $838.64 | +99.0% | -$690.00 |
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 $380.24 on the downside to $462.64 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 34.35% 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 at $421.44 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LII chain strike and the premiums come straight from that session's 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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.10%), the computed maximum profit is $1,310.00 per contract and the computed maximum loss is -$690.00 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 $413.10 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The LII market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.78%; 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 34.10% with IV rank near 34.35%, 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.