NAT Strangle Strategy
NAT (Nordic American Tankers Limited), in the Industrials sector, (Marine Shipping industry), listed on NYSE.
Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 24 Suezmax crude oil tankers. The company was formerly known as Nordic American Tanker Shipping Limited and changed its name to Nordic American Tankers Limited in June 2011. The company was incorporated in 1995 and is based in Hamilton, Bermuda.
NAT (Nordic American Tankers Limited) trades in the Industrials sector, specifically Marine Shipping, with a market capitalization of approximately $1.19B, a trailing P/E of 96.62, a beta of -0.52 versus the broader market, a 52-week range of 2.55-6.34, average daily share volume of 5.1M, a public-listing history dating back to 1997, approximately 15 full-time employees. These structural characteristics shape how NAT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.52 indicates NAT has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 96.62 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. NAT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on NAT?
A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money.
Current NAT snapshot
As of May 15, 2026, spot at $5.46, ATM IV 61.10%, IV rank 19.69%, expected move 17.52%. The strangle on NAT 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 strangle structure on NAT specifically: NAT IV at 61.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a NAT strangle, with a market-implied 1-standard-deviation move of approximately 17.52% (roughly $0.96 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 NAT expiries trade a higher absolute premium for lower per-day decay. Position sizing on NAT should anchor to the underlying notional of $5.46 per share and to the trader's directional view on NAT stock.
NAT strangle setup
The NAT strangle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With NAT near $5.46, the first option leg uses a $5.73 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NAT 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 NAT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $5.73 | N/A |
| Buy 1 | Put | $5.19 | N/A |
NAT strangle 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 put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit.
NAT strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on NAT. 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 strangle on NAT
Strangles on NAT are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the NAT chain.
NAT thesis for this strangle
The market-implied 1-standard-deviation range for NAT extends from approximately $4.50 on the downside to $6.42 on the upside. A NAT long strangle is the OTM cousin of the straddle: lower up-front cost but the underlying has to travel further past either OTM strike before the position turns profitable at expiration. Current NAT IV rank near 19.69% 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 NAT at 61.10%. As a Industrials name, NAT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NAT-specific events.
NAT strangle positions are structurally neutral / high-volatility (long premium, OTM); 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. NAT positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NAT alongside the broader basket even when NAT-specific fundamentals are unchanged. Always rebuild the position from current NAT chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on NAT?
- A strangle on NAT is the strangle strategy applied to NAT (stock). The strategy is structurally neutral / high-volatility (long premium, OTM): A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money. With NAT stock trading near $5.46, the strikes shown on this page are snapped to the nearest listed NAT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NAT strangle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit. For the NAT strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 61.10%), 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 NAT strangle?
- The breakeven for the NAT strangle 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 NAT market-implied 1-standard-deviation expected move is approximately 17.52%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on NAT?
- Strangles on NAT are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the NAT chain.
- How does current NAT implied volatility affect this strangle?
- NAT ATM IV is at 61.10% with IV rank near 19.69%, 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.