MCY Cash-Secured Put Strategy
MCY (Mercury General Corporation), in the Financial Services sector, (Insurance - Property & Casualty industry), listed on NYSE.
Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, and umbrella insurance products. Its automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprise dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents and insurance agencies, as well as directly through internet sales portals in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.
MCY (Mercury General Corporation) trades in the Financial Services sector, specifically Insurance - Property & Casualty, with a market capitalization of approximately $5.52B, a trailing P/E of 6.57, a beta of 0.94 versus the broader market, a 52-week range of 59.01-102.37, average daily share volume of 272K, a public-listing history dating back to 1985, approximately 4K full-time employees. These structural characteristics shape how MCY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.94 places MCY roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 6.57 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. MCY 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 MCY?
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.
Current MCY snapshot
As of May 15, 2026, spot at $98.35, ATM IV 29.40%, IV rank 31.55%, expected move 8.43%. The cash-secured put on MCY 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 cash-secured put structure on MCY specifically: MCY IV at 29.40% is mid-range versus its 1-year history, so the credit collected on a MCY cash-secured put sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 8.43% (roughly $8.29 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 MCY expiries trade a higher absolute premium for lower per-day decay. Position sizing on MCY should anchor to the underlying notional of $98.35 per share and to the trader's directional view on MCY stock.
MCY cash-secured put setup
The MCY cash-secured put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MCY near $98.35, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MCY 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 MCY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $95.00 | $1.98 |
MCY cash-secured put risk and reward
- Net Premium / Debit
- +$197.50
- Max Profit (per contract)
- $197.50
- Max Loss (per contract)
- -$9,301.50
- Breakeven(s)
- $93.03
- Risk / Reward Ratio
- 0.021
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
MCY cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on MCY. 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% | -$9,301.50 |
| $21.75 | -77.9% | -$7,127.04 |
| $43.50 | -55.8% | -$4,952.58 |
| $65.24 | -33.7% | -$2,778.11 |
| $86.99 | -11.6% | -$603.65 |
| $108.73 | +10.6% | +$197.50 |
| $130.48 | +32.7% | +$197.50 |
| $152.22 | +54.8% | +$197.50 |
| $173.97 | +76.9% | +$197.50 |
| $195.71 | +99.0% | +$197.50 |
When traders use cash-secured put on MCY
Cash-secured puts on MCY earn premium while a trader waits to acquire MCY stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning MCY.
MCY thesis for this cash-secured put
The market-implied 1-standard-deviation range for MCY extends from approximately $90.06 on the downside to $106.64 on the upside. A MCY cash-secured put lets a trader earn premium while waiting to acquire MCY 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 MCY IV rank near 31.55% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put thesis on MCY should anchor more to the directional view and the expected-move geometry. As a Financial Services name, MCY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MCY-specific events.
MCY 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. MCY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MCY alongside the broader basket even when MCY-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on MCY carry tail risk when realized volatility exceeds the implied move; review historical MCY earnings reactions and macro stress periods before sizing. Always rebuild the position from current MCY chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on MCY?
- A cash-secured put on MCY is the cash-secured put strategy applied to MCY (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 MCY stock trading near $98.35, the strikes shown on this page are snapped to the nearest listed MCY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MCY 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 MCY cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 29.40%), the computed maximum profit is $197.50 per contract and the computed maximum loss is -$9,301.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MCY cash-secured put?
- The breakeven for the MCY cash-secured put priced on this page is roughly $93.03 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 MCY market-implied 1-standard-deviation expected move is approximately 8.43%; 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 MCY?
- Cash-secured puts on MCY earn premium while a trader waits to acquire MCY stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning MCY.
- How does current MCY implied volatility affect this cash-secured put?
- MCY ATM IV is at 29.40% with IV rank near 31.55%, 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.