MGRC Bear Put Spread Strategy
MGRC (McGrath RentCorp), in the Industrials sector, (Rental & Leasing Services industry), listed on NASDAQ.
McGrath RentCorp (MGRC) operates as a diversified business-to-business provider of rental solutions, serving clients across the United States and internationally. Its primary offerings encompass a range of temporary infrastructure and specialized equipment, including versatile modular structures, portable storage units, advanced electronic testing apparatus, and various liquid and solid containment solutions. The company's operations are divided into four distinct segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. Mobile Modular specializes in the rental and sale of adaptable modular buildings and portable storage containers. These structures cater to diverse applications such as educational facilities, temporary workplaces, sales outposts, construction site offices, healthcare clinics, and more. TRS-RenTelco focuses on providing (renting and selling) advanced electronic test and measurement equipment.
MGRC (McGrath RentCorp) trades in the Industrials sector, specifically Rental & Leasing Services, with a market capitalization of approximately $3.03B, a trailing P/E of 19.57, a beta of 0.44 versus the broader market, a 52-week range of 94.99-128.41, average daily share volume of 223K, a public-listing history dating back to 1984, approximately 1K full-time employees. These structural characteristics shape how MGRC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.44 indicates MGRC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MGRC 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 MGRC?
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 MGRC snapshot
As of June 30, 2026, spot at $121.77, ATM IV 26.60%, IV rank 6.51%, expected move 7.63%. The bear put spread on MGRC 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 80-day expiry.
Why this bear put spread structure on MGRC specifically: MGRC IV at 26.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a MGRC bear put spread, with a market-implied 1-standard-deviation move of approximately 7.63% (roughly $9.29 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MGRC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MGRC should anchor to the underlying notional of $121.77 per share and to the trader's directional view on MGRC stock.
MGRC bear put spread setup
The MGRC 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 MGRC near $121.77, the first option leg uses a $120.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MGRC chain at a 80-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 MGRC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $120.00 | $9.63 |
| Sell 1 | Put | $115.00 | $7.47 |
MGRC bear put spread risk and reward
- Net Premium / Debit
- -$216.00
- Max Profit (per contract)
- $284.00
- Max Loss (per contract)
- -$216.00
- Breakeven(s)
- $117.84
- Risk / Reward Ratio
- 1.315
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.
MGRC bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on MGRC. 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% | +$284.00 |
| $26.93 | -77.9% | +$284.00 |
| $53.86 | -55.8% | +$284.00 |
| $80.78 | -33.7% | +$284.00 |
| $107.70 | -11.6% | +$284.00 |
| $134.62 | +10.6% | -$216.00 |
| $161.55 | +32.7% | -$216.00 |
| $188.47 | +54.8% | -$216.00 |
| $215.39 | +76.9% | -$216.00 |
| $242.32 | +99.0% | -$216.00 |
When traders use bear put spread on MGRC
Bear put spreads on MGRC reduce the cost of a bearish MGRC stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
MGRC thesis for this bear put spread
The market-implied 1-standard-deviation range for MGRC extends from approximately $112.48 on the downside to $131.06 on the upside. A MGRC bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on MGRC, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current MGRC IV rank near 6.51% 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 MGRC at 26.60%. As a Industrials name, MGRC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MGRC-specific events.
MGRC 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. MGRC positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MGRC alongside the broader basket even when MGRC-specific fundamentals are unchanged. Long-premium structures like a bear put spread on MGRC 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 MGRC chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on MGRC?
- A bear put spread on MGRC is the bear put spread strategy applied to MGRC (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 MGRC stock trading near $121.77, the strikes shown on this page are snapped to the nearest listed MGRC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MGRC 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 MGRC bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 26.60%), the computed maximum profit is $284.00 per contract and the computed maximum loss is -$216.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MGRC bear put spread?
- The breakeven for the MGRC bear put spread priced on this page is roughly $117.84 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 MGRC market-implied 1-standard-deviation expected move is approximately 7.63%; 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 MGRC?
- Bear put spreads on MGRC reduce the cost of a bearish MGRC 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 MGRC implied volatility affect this bear put spread?
- MGRC ATM IV is at 26.60% with IV rank near 6.51%, 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.