MPAA Straddle Strategy
MPAA (Motorcar Parts of America, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.
Motorcar Parts of America, Inc. manufactures, remanufactures, and distributes heavy-duty truck, industrial, marine, and agricultural application replacement parts. The company offers rotating electrical products, including alternators and starters; wheel hub assemblies and bearings; and brake-related products comprising brake calipers, brake boosters, brake rotors, brake pads, and brake master cylinders. It also offers test solutions and diagnostic equipment for electric vehicle powertrain development and manufacturing, including electric motor test systems, e-axle test systems, advanced power emulators, and charging unit test systems, as well as test systems for alternators, starters, belt starter generator, and bench-top testers, as well as turbochargers and test services for electric vehicle inverters. The company sells its products to automotive retail chain stores and warehouse distributors, as well as various automobile manufacturers for their aftermarket programs and warranty replacement programs in North America. Motorcar Parts of America, Inc. was founded in 1968 and is headquartered in Torrance, California.
MPAA (Motorcar Parts of America, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $215.0M, a trailing P/E of 111.31, a beta of 1.23 versus the broader market, a 52-week range of 9.29-18.12, average daily share volume of 102K, a public-listing history dating back to 1994, approximately 6K full-time employees. These structural characteristics shape how MPAA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.23 places MPAA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 111.31 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a straddle on MPAA?
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 MPAA snapshot
As of May 15, 2026, spot at $11.04, ATM IV 92.60%, IV rank 43.91%, expected move 26.55%. The straddle on MPAA 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 MPAA specifically: MPAA IV at 92.60% 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 26.55% (roughly $2.93 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 MPAA expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPAA should anchor to the underlying notional of $11.04 per share and to the trader's directional view on MPAA stock.
MPAA straddle setup
The MPAA 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 MPAA near $11.04, the first option leg uses a $11.04 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPAA 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 MPAA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $11.04 | N/A |
| Buy 1 | Put | $11.04 | N/A |
MPAA straddle risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
MPAA straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on MPAA. 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.
When traders use straddle on MPAA
Straddles on MPAA are pure-volatility plays that profit from large moves in either direction; traders typically buy MPAA straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
MPAA thesis for this straddle
The market-implied 1-standard-deviation range for MPAA extends from approximately $8.11 on the downside to $13.97 on the upside. A MPAA 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 MPAA IV rank near 43.91% is mid-range against its 1-year distribution, so the IV signal is neutral; the straddle thesis on MPAA should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, MPAA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPAA-specific events.
MPAA 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. MPAA positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPAA alongside the broader basket even when MPAA-specific fundamentals are unchanged. Always rebuild the position from current MPAA chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on MPAA?
- A straddle on MPAA is the straddle strategy applied to MPAA (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 MPAA stock trading near $11.04, the strikes shown on this page are snapped to the nearest listed MPAA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MPAA 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 MPAA straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 92.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MPAA straddle?
- The breakeven for the MPAA straddle priced on this page is no defined breakeven on the modeled curve 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 MPAA market-implied 1-standard-deviation expected move is approximately 26.55%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on MPAA?
- Straddles on MPAA are pure-volatility plays that profit from large moves in either direction; traders typically buy MPAA 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 MPAA implied volatility affect this straddle?
- MPAA ATM IV is at 92.60% with IV rank near 43.91%, 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.