How are O 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 O straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 18.30%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$264.12 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a O straddle?

The breakeven for the O straddle priced on this page is roughly $57.08 and $62.93 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 O market-implied 1-standard-deviation expected move is approximately 5.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current O implied volatility affect this straddle?

O ATM IV is at 18.30% with IV rank near 50.23%, 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.

O Straddle Strategy

O (Realty Income Corporation), in the Real Estate sector, (REIT - Retail industry), listed on NYSE.

Realty Income, The Monthly Dividend Company, is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with our commercial clients. To date, the company has declared 608 consecutive common stock monthly dividends throughout its 52-year operating history and increased the dividend 109 times since Realty Income's public listing in 1994 (NYSE: O). The company is a member of the S&P 500 Dividend Aristocrats index. Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

O (Realty Income Corporation) trades in the Real Estate sector, specifically REIT - Retail, with a market capitalization of approximately $57.37B, a trailing P/E of 49.67, a beta of 0.76 versus the broader market, a 52-week range of 54.52-67.94, average daily share volume of 6.0M, a public-listing history dating back to 1994, approximately 468 full-time employees. These structural characteristics shape how O stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.76 places O roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 49.67 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. O pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a straddle on O?

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 O snapshot

As of May 15, 2026, spot at $61.25, ATM IV 18.30%, IV rank 50.23%, expected move 5.25%. The straddle on O 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 O specifically: O IV at 18.30% 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 5.25% (roughly $3.21 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 O expiries trade a higher absolute premium for lower per-day decay. Position sizing on O should anchor to the underlying notional of $61.25 per share and to the trader's directional view on O stock.

O straddle setup

The O 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 O near $61.25, the first option leg uses a $60.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed O 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 O shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$60.00	$2.13
Buy 1	Put	$60.00	$0.80

O straddle risk and reward

Net Premium / Debit: -$292.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$264.12
Breakeven(s): $57.08, $62.93
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.

O straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on O. 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	-100.0%	+$5,706.50
$13.55	-77.9%	+$4,352.34
$27.09	-55.8%	+$2,998.18
$40.63	-33.7%	+$1,644.02
$54.18	-11.5%	+$289.86
$67.72	+10.6%	+$479.30
$81.26	+32.7%	+$1,833.46
$94.80	+54.8%	+$3,187.63
$108.34	+76.9%	+$4,541.79
$121.88	+99.0%	+$5,895.95

When traders use straddle on O

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

O thesis for this straddle

The market-implied 1-standard-deviation range for O extends from approximately $58.04 on the downside to $64.46 on the upside. A O 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 O IV rank near 50.23% is mid-range against its 1-year distribution, so the IV signal is neutral; the straddle thesis on O should anchor more to the directional view and the expected-move geometry. As a Real Estate name, O options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to O-specific events.

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

Frequently asked questions

What is a straddle on O?: A straddle on O is the straddle strategy applied to O (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 O stock trading near $61.25, the strikes shown on this page are snapped to the nearest listed O chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are O 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 O straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 18.30%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$264.12 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a O straddle?: The breakeven for the O straddle priced on this page is roughly $57.08 and $62.93 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 O market-implied 1-standard-deviation expected move is approximately 5.25%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on O?: Straddles on O are pure-volatility plays that profit from large moves in either direction; traders typically buy O 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 O implied volatility affect this straddle?: O ATM IV is at 18.30% with IV rank near 50.23%, 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.