How are NU 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 NU strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 39.84%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$49.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a NU strangle?

The breakeven for the NU strangle priced on this page is roughly $11.01 and $13.50 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 NU market-implied 1-standard-deviation expected move is approximately 11.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current NU implied volatility affect this strangle?

NU ATM IV is at 39.84% with IV rank near 43.02%, 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.

NU Strangle Strategy

NU (Nu Holdings Ltd.), in the Financial Services sector, (Banks - Diversified industry), listed on NYSE.

Nu Holdings Ltd. operates as a digital financial services platform and technology company primarily in Brazil, Mexico, and Colombia. It offers Nu credit and debit cards; Ultraviolet credit and debit cards; and mobile payment solutions for NuAccount customers to make and receive transfers, pay bills, and make everyday purchases through their mobile phones. The company provides savings solutions, such as Nu Personal Accounts, a digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings; and Nu business accounts designed specifically for entrepreneur customers and their businesses. In addition, it offers NuInvest, an investment product that provides equity, fixed-income, options, and ETF products, as well as multimarket funds with curated asset allocations based on the customer's risk profile and financial position; personal unsecured loans; in-app buy now pay later' solution for Nu card customers to pay credit and debit purchases, and banking payment slips over time in up to twelve installments; and NuInsurance protecting solutions to help its customers secure life insurance and funeral benefits. The company was founded in 2013 and is headquartered in Sao Paulo, Brazil.

NU (Nu Holdings Ltd.) trades in the Financial Services sector, specifically Banks - Diversified, with a market capitalization of approximately $61.94B, a trailing P/E of 21.60, a beta of 1.01 versus the broader market, a 52-week range of 11.71-18.98, average daily share volume of 51.2M, a public-listing history dating back to 2021, approximately 5K full-time employees. These structural characteristics shape how NU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.01 places NU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a strangle on NU?

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 NU snapshot

As of May 15, 2026, spot at $12.20, ATM IV 39.84%, IV rank 43.02%, expected move 11.42%. The strangle on NU 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 28-day expiry.

Why this strangle structure on NU specifically: NU IV at 39.84% 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 11.42% (roughly $1.39 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NU expiries trade a higher absolute premium for lower per-day decay. Position sizing on NU should anchor to the underlying notional of $12.20 per share and to the trader's directional view on NU stock.

NU strangle setup

The NU 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 NU near $12.20, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NU chain at a 28-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 NU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$13.00	$0.25
Buy 1	Put	$11.50	$0.25

NU strangle risk and reward

Net Premium / Debit: -$49.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$49.50
Breakeven(s): $11.01, $13.50
Risk / Reward Ratio: Unbounded

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.

NU strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on NU. 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%	+$1,099.50
$2.71	-77.8%	+$829.86
$5.40	-55.7%	+$560.22
$8.10	-33.6%	+$290.59
$10.80	-11.5%	+$20.95
$13.49	+10.6%	-$0.31
$16.19	+32.7%	+$269.33
$18.88	+54.8%	+$538.97
$21.58	+76.9%	+$808.61
$24.28	+99.0%	+$1,078.24

When traders use strangle on NU

Strangles on NU 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 NU chain.

NU thesis for this strangle

The market-implied 1-standard-deviation range for NU extends from approximately $10.81 on the downside to $13.59 on the upside. A NU 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 NU IV rank near 43.02% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle thesis on NU should anchor more to the directional view and the expected-move geometry. As a Financial Services name, NU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NU-specific events.

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

Frequently asked questions

What is a strangle on NU?: A strangle on NU is the strangle strategy applied to NU (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 NU stock trading near $12.20, the strikes shown on this page are snapped to the nearest listed NU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are NU 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 NU strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 39.84%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$49.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a NU strangle?: The breakeven for the NU strangle priced on this page is roughly $11.01 and $13.50 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 NU market-implied 1-standard-deviation expected move is approximately 11.42%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on NU?: Strangles on NU 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 NU chain.
How does current NU implied volatility affect this strangle?: NU ATM IV is at 39.84% with IV rank near 43.02%, 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.