How are MTH 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 MTH straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$630.08 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MTH straddle?

The breakeven for the MTH straddle priced on this page is roughly $65.85 and $79.15 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MTH market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MTH implied volatility affect this straddle?

MTH ATM IV is at 36.60% with IV rank near 14.30%, 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.

MTH Straddle Strategy

MTH (Meritage Homes Corporation), in the Consumer Cyclical sector, (Residential Construction industry), listed on NYSE.

Meritage Homes Corporation, alongside its associated companies, focuses on the design and construction of single-family residences throughout the United States. The enterprise operates primarily through two distinct divisions: home construction and financial services. Its core business involves acquiring and developing land, followed by the building, marketing, and selling of homes, predominantly targeting first-time buyers and those seeking their initial upgrade. Furthermore, the company provides its homebuyers with crucial services such as title insurance and support for closing and settlement processes. Meritage Homes constructs and sells properties under its own brand name across a wide geographic footprint, including Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee. The company was established in 1985 and has its corporate headquarters situated in Scottsdale, Arizona.

MTH (Meritage Homes Corporation) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $4.86B, a trailing P/E of 14.74, a beta of 1.36 versus the broader market, a 52-week range of 58.03-85.38, average daily share volume of 925K, a public-listing history dating back to 1988, approximately 2K full-time employees. These structural characteristics shape how MTH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.36 indicates MTH has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. MTH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a straddle on MTH?

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.

MTH snapshot

As of August 14, 2026, spot at $73.25, ATM IV 36.60%, IV rank 14.30%, expected move 10.49%. The straddle on MTH below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this straddle structure on MTH specifically: MTH IV at 36.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a MTH straddle, with a market-implied 1-standard-deviation move of approximately 10.49% (roughly $7.69 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MTH expiries trade a higher absolute premium for lower per-day decay. Position sizing on MTH should anchor to the underlying notional of $73.25 per share and to the trader's directional view on MTH stock.

MTH straddle setup

The MTH straddle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MTH at $73.25 on that close, the first option leg uses a $72.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MTH chain at a 35-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 MTH shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$72.50	$3.65
Buy 1	Put	$72.50	$3.00

MTH straddle risk and reward

Net Premium / Debit: -$665.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$630.08
Breakeven(s): $65.85, $79.15
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.

MTH straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on MTH. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	+$6,584.00
$16.20	-77.9%	+$4,964.51
$32.40	-55.8%	+$3,345.03
$48.59	-33.7%	+$1,725.54
$64.79	-11.6%	+$106.05
$80.98	+10.6%	+$183.44
$97.18	+32.7%	+$1,802.92
$113.37	+54.8%	+$3,422.41
$129.57	+76.9%	+$5,041.90
$145.76	+99.0%	+$6,661.39

When traders use straddle on MTH

Straddles on MTH are pure-volatility plays that profit from large moves in either direction; traders typically buy MTH straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.

MTH thesis for this straddle

The market-implied 1-standard-deviation range for MTH extends from approximately $65.56 on the downside to $80.94 on the upside. A MTH 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 MTH IV rank near 14.30% 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 MTH at 36.60%. As a Consumer Cyclical name, MTH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MTH-specific events.

MTH 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. MTH positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MTH alongside the broader basket even when MTH-specific fundamentals are unchanged. Always rebuild the position from current MTH chain quotes before placing a trade.

Frequently asked questions

What is a straddle on MTH?: A straddle on MTH is the straddle strategy applied to MTH (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 MTH stock at $73.25 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed MTH chain strike and the premiums come straight from that session's bid/ask midpoint.
How are MTH 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 MTH straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$630.08 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MTH straddle?: The breakeven for the MTH straddle priced on this page is roughly $65.85 and $79.15 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The MTH market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on MTH?: Straddles on MTH are pure-volatility plays that profit from large moves in either direction; traders typically buy MTH 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 MTH implied volatility affect this straddle?: MTH ATM IV is at 36.60% with IV rank near 14.30%, 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.