MTG Bear Put Spread Strategy
MTG (MGIC Investment Corporation), in the Financial Services sector, (Insurance - Specialty industry), listed on NYSE.
MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.
MTG (MGIC Investment Corporation) trades in the Financial Services sector, specifically Insurance - Specialty, with a market capitalization of approximately $5.45B, a trailing P/E of 7.76, a beta of 0.71 versus the broader market, a 52-week range of 24.78-29.97, average daily share volume of 2.1M, a public-listing history dating back to 1991, approximately 555 full-time employees. These structural characteristics shape how MTG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.71 places MTG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 7.76 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. MTG 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 MTG?
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 MTG snapshot
As of May 15, 2026, spot at $25.93, ATM IV 14.90%, IV rank 4.61%, expected move 4.27%. The bear put spread on MTG 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 bear put spread structure on MTG specifically: MTG IV at 14.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a MTG bear put spread, with a market-implied 1-standard-deviation move of approximately 4.27% (roughly $1.11 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 MTG expiries trade a higher absolute premium for lower per-day decay. Position sizing on MTG should anchor to the underlying notional of $25.93 per share and to the trader's directional view on MTG stock.
MTG bear put spread setup
The MTG 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 MTG near $25.93, the first option leg uses a $25.93 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MTG 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 MTG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $25.93 | N/A |
| Sell 1 | Put | $24.63 | N/A |
MTG bear put spread 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
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.
MTG bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on MTG. 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 bear put spread on MTG
Bear put spreads on MTG reduce the cost of a bearish MTG stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
MTG thesis for this bear put spread
The market-implied 1-standard-deviation range for MTG extends from approximately $24.82 on the downside to $27.04 on the upside. A MTG bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on MTG, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current MTG IV rank near 4.61% 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 MTG at 14.90%. As a Financial Services name, MTG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MTG-specific events.
MTG 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. MTG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MTG alongside the broader basket even when MTG-specific fundamentals are unchanged. Long-premium structures like a bear put spread on MTG 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 MTG chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on MTG?
- A bear put spread on MTG is the bear put spread strategy applied to MTG (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 MTG stock trading near $25.93, the strikes shown on this page are snapped to the nearest listed MTG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MTG 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 MTG bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 14.90%), 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 MTG bear put spread?
- The breakeven for the MTG bear put spread 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 MTG market-implied 1-standard-deviation expected move is approximately 4.27%; 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 MTG?
- Bear put spreads on MTG reduce the cost of a bearish MTG 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 MTG implied volatility affect this bear put spread?
- MTG ATM IV is at 14.90% with IV rank near 4.61%, 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.