LII Cash-Secured Put 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 cash-secured put on LII?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
LII snapshot
As of August 14, 2026, spot at $421.44, ATM IV 34.10%, IV rank 34.35%, expected move 9.78%. The cash-secured put 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 cash-secured put structure on LII specifically: LII IV at 34.10% is mid-range versus its 1-year history, so the credit collected on a LII cash-secured put sits in line with its long-run distribution, 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 cash-secured put setup
The LII cash-secured put 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 $400.00 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) |
|---|---|---|---|
| Sell 1 | Put | $400.00 | $9.20 |
LII cash-secured put risk and reward
- Net Premium / Debit
- +$920.00
- Max Profit (per contract)
- $920.00
- Max Loss (per contract)
- -$39,079.00
- Breakeven(s)
- $390.80
- Risk / Reward Ratio
- 0.024
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
LII cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put 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% | -$39,079.00 |
| $93.19 | -77.9% | -$29,760.84 |
| $186.37 | -55.8% | -$20,442.68 |
| $279.55 | -33.7% | -$11,124.52 |
| $372.74 | -11.6% | -$1,806.36 |
| $465.92 | +10.6% | +$920.00 |
| $559.10 | +32.7% | +$920.00 |
| $652.28 | +54.8% | +$920.00 |
| $745.46 | +76.9% | +$920.00 |
| $838.64 | +99.0% | +$920.00 |
When traders use cash-secured put on LII
Cash-secured puts on LII earn premium while a trader waits to acquire LII stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LII.
LII thesis for this cash-secured put
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 cash-secured put lets a trader earn premium while waiting to acquire LII at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current LII IV rank near 34.35% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put 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 cash-secured put positions are structurally neutral to slightly bullish; 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. Short-premium structures like a cash-secured put on LII carry tail risk when realized volatility exceeds the implied move; review historical LII earnings reactions and macro stress periods before sizing. Always rebuild the position from current LII chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on LII?
- A cash-secured put on LII is the cash-secured put strategy applied to LII (stock). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. 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 cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the LII cash-secured put priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.10%), the computed maximum profit is $920.00 per contract and the computed maximum loss is -$39,079.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LII cash-secured put?
- The breakeven for the LII cash-secured put priced on this page is roughly $390.80 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 cash-secured put on LII?
- Cash-secured puts on LII earn premium while a trader waits to acquire LII stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LII.
- How does current LII implied volatility affect this cash-secured put?
- 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.