NG Straddle Strategy
NG (NovaGold Resources Inc.), in the Basic Materials sector, (Gold industry), listed on AMEX.
NovaGold Resources Inc. explores for and develops gold mineral properties in the United States. Its principal asset is the Donlin Gold project consisting of 493 mining claims covering an area of approximately 29,008 hectares located in the Kuskokwim region of southwestern Alaska. The company was formerly known as NovaCan Mining Resources (1985) Limited and changed its name to NovaGold Resources Inc. in March 1987. NovaGold Resources Inc. was incorporated in 1984 and is based in Vancouver, Canada.
NG (NovaGold Resources Inc.) trades in the Basic Materials sector, specifically Gold, with a market capitalization of approximately $3.98B, a beta of 2.10 versus the broader market, a 52-week range of 3.4-14.4, average daily share volume of 3.7M, a public-listing history dating back to 2003, approximately 14 full-time employees. These structural characteristics shape how NG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.10 indicates NG has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a straddle on NG?
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 NG snapshot
As of May 15, 2026, spot at $8.16, ATM IV 67.40%, IV rank 37.56%, expected move 19.32%. The straddle on NG 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 NG specifically: NG IV at 67.40% 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 19.32% (roughly $1.58 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 NG expiries trade a higher absolute premium for lower per-day decay. Position sizing on NG should anchor to the underlying notional of $8.16 per share and to the trader's directional view on NG stock.
NG straddle setup
The NG 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 NG near $8.16, the first option leg uses a $8.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NG 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 NG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $8.00 | $0.80 |
| Buy 1 | Put | $8.00 | $0.58 |
NG straddle risk and reward
- Net Premium / Debit
- -$137.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$133.51
- Breakeven(s)
- $6.63, $9.38
- 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.
NG straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on NG. 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 | -99.9% | +$661.50 |
| $1.81 | -77.8% | +$481.19 |
| $3.62 | -55.7% | +$300.88 |
| $5.42 | -33.6% | +$120.57 |
| $7.22 | -11.5% | -$59.75 |
| $9.03 | +10.6% | -$34.94 |
| $10.83 | +32.7% | +$145.37 |
| $12.63 | +54.8% | +$325.68 |
| $14.43 | +76.9% | +$505.99 |
| $16.24 | +99.0% | +$686.30 |
When traders use straddle on NG
Straddles on NG are pure-volatility plays that profit from large moves in either direction; traders typically buy NG straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
NG thesis for this straddle
The market-implied 1-standard-deviation range for NG extends from approximately $6.58 on the downside to $9.74 on the upside. A NG 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 NG IV rank near 37.56% is mid-range against its 1-year distribution, so the IV signal is neutral; the straddle thesis on NG should anchor more to the directional view and the expected-move geometry. As a Basic Materials name, NG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NG-specific events.
NG 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. NG positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NG alongside the broader basket even when NG-specific fundamentals are unchanged. Always rebuild the position from current NG chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on NG?
- A straddle on NG is the straddle strategy applied to NG (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 NG stock trading near $8.16, the strikes shown on this page are snapped to the nearest listed NG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NG 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 NG straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 67.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$133.51 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NG straddle?
- The breakeven for the NG straddle priced on this page is roughly $6.63 and $9.38 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 NG market-implied 1-standard-deviation expected move is approximately 19.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on NG?
- Straddles on NG are pure-volatility plays that profit from large moves in either direction; traders typically buy NG 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 NG implied volatility affect this straddle?
- NG ATM IV is at 67.40% with IV rank near 37.56%, 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.