METC Straddle Strategy
METC (Ramaco Resources, Inc.), in the Energy sector, (Coal industry), listed on NASDAQ.
Ramaco Resources, Inc. produces and sells metallurgical coal. The company's development portfolio includes the Elk Creek project consisting of approximately 20,200 acres of controlled mineral and 16 seams located in southern West Virginia; the Berwind property comprising approximately 41,300 acres of controlled mineral and an area of Squire Jim seam coal deposits, which is situated on the border of West Virginia and Virginia; the Knox Creek property consisting of approximately 62,100 acres of controlled mineral that is located in Virginia; and the RAM Mine property comprising approximately 1,570 acres of controlled mineral, which is situated in southwestern Pennsylvania. The company serves blast furnace steel mills and coke plants in the United States, as well as international metallurgical coal consumers. The company was founded in 2015 and is headquartered in Lexington, Kentucky.
METC (Ramaco Resources, Inc.) trades in the Energy sector, specifically Coal, with a market capitalization of approximately $856.8M, a beta of 1.35 versus the broader market, a 52-week range of 8.51-57.8, average daily share volume of 1.8M, a public-listing history dating back to 2017, approximately 984 full-time employees. These structural characteristics shape how METC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.35 indicates METC has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. METC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on METC?
A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration.
Current METC snapshot
As of May 15, 2026, spot at $14.42, ATM IV 82.20%, IV rank 11.37%, expected move 23.57%. The straddle on METC 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 straddle structure on METC specifically: METC IV at 82.20% is on the cheap side of its 1-year range, which favors premium-buying structures like a METC straddle, with a market-implied 1-standard-deviation move of approximately 23.57% (roughly $3.40 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 METC expiries trade a higher absolute premium for lower per-day decay. Position sizing on METC should anchor to the underlying notional of $14.42 per share and to the trader's directional view on METC stock.
METC straddle setup
The METC straddle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With METC near $14.42, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed METC 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 METC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $14.00 | $1.65 |
| Buy 1 | Put | $14.00 | $1.20 |
METC straddle risk and reward
- Net Premium / Debit
- -$285.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$278.72
- Breakeven(s)
- $11.15, $16.85
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit.
METC straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on METC. 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 | -99.9% | +$1,114.00 |
| $3.20 | -77.8% | +$795.28 |
| $6.38 | -55.7% | +$476.55 |
| $9.57 | -33.6% | +$157.83 |
| $12.76 | -11.5% | -$160.89 |
| $15.95 | +10.6% | -$90.38 |
| $19.13 | +32.7% | +$228.34 |
| $22.32 | +54.8% | +$547.07 |
| $25.51 | +76.9% | +$865.79 |
| $28.70 | +99.0% | +$1,184.51 |
When traders use straddle on METC
Straddles on METC are pure-volatility plays that profit from large moves in either direction; traders typically buy METC straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
METC thesis for this straddle
The market-implied 1-standard-deviation range for METC extends from approximately $11.02 on the downside to $17.82 on the upside. A METC long straddle is a pure-volatility play: it profits when the underlying moves far enough from the strike in either direction to overcome the combined call plus put debit, regardless of direction. Current METC IV rank near 11.37% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on METC at 82.20%. As a Energy name, METC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to METC-specific events.
METC straddle positions are structurally neutral / high-volatility (long premium); 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. METC positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move METC alongside the broader basket even when METC-specific fundamentals are unchanged. Always rebuild the position from current METC chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on METC?
- A straddle on METC is the straddle strategy applied to METC (stock). The strategy is structurally neutral / high-volatility (long premium): A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration. With METC stock trading near $14.42, the strikes shown on this page are snapped to the nearest listed METC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are METC straddle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit. For the METC straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 82.20%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$278.72 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a METC straddle?
- The breakeven for the METC straddle priced on this page is roughly $11.15 and $16.85 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 METC market-implied 1-standard-deviation expected move is approximately 23.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on METC?
- Straddles on METC are pure-volatility plays that profit from large moves in either direction; traders typically buy METC straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
- How does current METC implied volatility affect this straddle?
- METC ATM IV is at 82.20% with IV rank near 11.37%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.