NJR Straddle Strategy
NJR (New Jersey Resources Corporation), in the Utilities sector, (Regulated Gas industry), listed on NYSE.
New Jersey Resources Corporation, an energy services holding company, provides regulated gas distribution, and retail and wholesale energy services. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 564,000 residential and commercial customers throughout Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates commercial and residential solar projects situated in New Jersey, Connecticut, Rhode Island, and New York. The Energy Services segment offers unregulated wholesale energy management services to other energy companies and natural gas producers, as well as maintains and transacts a portfolio of physical assets consisting of natural gas storage and transportation contracts in the United States and Canada. The Storage and Transportation segment invests in natural gas transportation and storage facilities.
NJR (New Jersey Resources Corporation) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $5.77B, a trailing P/E of 16.89, a beta of 0.53 versus the broader market, a 52-week range of 43.46-57.85, average daily share volume of 538K, a public-listing history dating back to 1980, approximately 1K full-time employees. These structural characteristics shape how NJR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.53 indicates NJR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. NJR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on NJR?
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 NJR snapshot
As of May 15, 2026, spot at $57.16, ATM IV 43.00%, IV rank 23.19%, expected move 12.33%. The straddle on NJR 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 NJR specifically: NJR IV at 43.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a NJR straddle, with a market-implied 1-standard-deviation move of approximately 12.33% (roughly $7.05 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 NJR expiries trade a higher absolute premium for lower per-day decay. Position sizing on NJR should anchor to the underlying notional of $57.16 per share and to the trader's directional view on NJR stock.
NJR straddle setup
The NJR 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 NJR near $57.16, the first option leg uses a $57.16 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NJR 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 NJR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $57.16 | N/A |
| Buy 1 | Put | $57.16 | N/A |
NJR 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.
NJR straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on NJR. 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 NJR
Straddles on NJR are pure-volatility plays that profit from large moves in either direction; traders typically buy NJR straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
NJR thesis for this straddle
The market-implied 1-standard-deviation range for NJR extends from approximately $50.11 on the downside to $64.21 on the upside. A NJR 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 NJR IV rank near 23.19% 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 NJR at 43.00%. As a Utilities name, NJR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NJR-specific events.
NJR 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. NJR positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NJR alongside the broader basket even when NJR-specific fundamentals are unchanged. Always rebuild the position from current NJR chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on NJR?
- A straddle on NJR is the straddle strategy applied to NJR (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 NJR stock trading near $57.16, the strikes shown on this page are snapped to the nearest listed NJR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NJR 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 NJR straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 43.00%), 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 NJR straddle?
- The breakeven for the NJR 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 NJR market-implied 1-standard-deviation expected move is approximately 12.33%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on NJR?
- Straddles on NJR are pure-volatility plays that profit from large moves in either direction; traders typically buy NJR 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 NJR implied volatility affect this straddle?
- NJR ATM IV is at 43.00% with IV rank near 23.19%, 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.