How are OTIS 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 OTIS straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 25.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$434.53 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a OTIS straddle?

The breakeven for the OTIS straddle priced on this page is roughly $65.55 and $74.45 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 OTIS market-implied 1-standard-deviation expected move is approximately 7.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current OTIS implied volatility affect this straddle?

OTIS ATM IV is at 25.50% with IV rank near 67.51%, 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.

OTIS Straddle Strategy

OTIS (Otis Worldwide Corporation), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.

Otis Worldwide Corporation manufactures, installs, and services elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. It had a network of approximately 34,000 service mechanics operating approximately 1,400 branches and offices. The company was founded in 1853 and is headquartered in Farmington, Connecticut.

OTIS (Otis Worldwide Corporation) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $28.10B, a trailing P/E of 19.19, a beta of 0.94 versus the broader market, a 52-week range of 72.51-101.42, average daily share volume of 3.9M, a public-listing history dating back to 2020, approximately 72K full-time employees. These structural characteristics shape how OTIS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.94 places OTIS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. OTIS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a straddle on OTIS?

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 OTIS snapshot

As of May 15, 2026, spot at $70.96, ATM IV 25.50%, IV rank 67.51%, expected move 7.31%. The straddle on OTIS 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 OTIS specifically: OTIS IV at 25.50% 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 7.31% (roughly $5.19 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 OTIS expiries trade a higher absolute premium for lower per-day decay. Position sizing on OTIS should anchor to the underlying notional of $70.96 per share and to the trader's directional view on OTIS stock.

OTIS straddle setup

The OTIS 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 OTIS near $70.96, the first option leg uses a $70.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OTIS 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 OTIS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$70.00	$2.85
Buy 1	Put	$70.00	$1.60

OTIS straddle risk and reward

Net Premium / Debit: -$445.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$434.53
Breakeven(s): $65.55, $74.45
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.

OTIS straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on OTIS. 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%	+$6,554.00
$15.70	-77.9%	+$4,985.15
$31.39	-55.8%	+$3,416.29
$47.08	-33.7%	+$1,847.44
$62.76	-11.5%	+$278.58
$78.45	+10.6%	+$400.27
$94.14	+32.7%	+$1,969.13
$109.83	+54.8%	+$3,537.98
$125.52	+76.9%	+$5,106.83
$141.21	+99.0%	+$6,675.69

When traders use straddle on OTIS

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

OTIS thesis for this straddle

The market-implied 1-standard-deviation range for OTIS extends from approximately $65.77 on the downside to $76.15 on the upside. A OTIS 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 OTIS IV rank near 67.51% is mid-range against its 1-year distribution, so the IV signal is neutral; the straddle thesis on OTIS should anchor more to the directional view and the expected-move geometry. As a Industrials name, OTIS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OTIS-specific events.

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

Frequently asked questions

What is a straddle on OTIS?: A straddle on OTIS is the straddle strategy applied to OTIS (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 OTIS stock trading near $70.96, the strikes shown on this page are snapped to the nearest listed OTIS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are OTIS 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 OTIS straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 25.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$434.53 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a OTIS straddle?: The breakeven for the OTIS straddle priced on this page is roughly $65.55 and $74.45 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 OTIS market-implied 1-standard-deviation expected move is approximately 7.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on OTIS?: Straddles on OTIS are pure-volatility plays that profit from large moves in either direction; traders typically buy OTIS 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 OTIS implied volatility affect this straddle?: OTIS ATM IV is at 25.50% with IV rank near 67.51%, 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.