PAG Bear Put Spread Strategy
PAG (Penske Automotive Group, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
Penske Automotive Group, Inc. (PAG) is a comprehensive transportation services enterprise, primarily involved in running automotive and commercial truck dealerships. Its business activities are organized into four main segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. The company operates a network of automotive dealerships under franchise agreements with various vehicle manufacturers, facilitating the sale of new and pre-owned automobiles. These dealerships also provide essential related services, including vehicle and collision repair, assisting with finance and lease agreements, offering third-party insurance products, and selling various aftermarket items, alongside wholesale parts distribution. In the commercial truck sector, Penske manages dealerships that offer new heavy and medium-duty trucks, notably Freightliner and Western Star brands, as well as a selection of used trucks, complemented by maintenance and repair services. Expanding its global reach, the company imports and distributes Western Star heavy-duty trucks, MAN heavy and medium-duty trucks and buses, and Dennis Eagle refuse collection vehicles, along with their associated parts, across Australia, New Zealand, and parts of the Pacific.
PAG (Penske Automotive Group, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $11.98B, a trailing P/E of 12.95, a beta of 0.88 versus the broader market, a 52-week range of 140.12-189.51, average daily share volume of 284K, a public-listing history dating back to 1996, approximately 29K full-time employees. These structural characteristics shape how PAG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places PAG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PAG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on PAG?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current PAG snapshot
As of June 29, 2026, spot at $179.20, ATM IV 31.00%, IV rank 2.72%, expected move 8.89%. The bear put spread on PAG 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 18-day expiry.
Why this bear put spread structure on PAG specifically: PAG IV at 31.00% is on the cheap side of its 1-year range, which favors premium-buying structures like a PAG bear put spread, with a market-implied 1-standard-deviation move of approximately 8.89% (roughly $15.93 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PAG expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAG should anchor to the underlying notional of $179.20 per share and to the trader's directional view on PAG stock.
PAG bear put spread setup
The PAG bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PAG near $179.20, the first option leg uses a $180.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAG chain at a 18-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 PAG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $180.00 | $4.65 |
| Sell 1 | Put | $170.00 | $1.33 |
PAG bear put spread risk and reward
- Net Premium / Debit
- -$332.00
- Max Profit (per contract)
- $668.00
- Max Loss (per contract)
- -$332.00
- Breakeven(s)
- $176.68
- Risk / Reward Ratio
- 2.012
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
PAG bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on PAG. 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% | +$668.00 |
| $39.63 | -77.9% | +$668.00 |
| $79.25 | -55.8% | +$668.00 |
| $118.87 | -33.7% | +$668.00 |
| $158.49 | -11.6% | +$668.00 |
| $198.12 | +10.6% | -$332.00 |
| $237.74 | +32.7% | -$332.00 |
| $277.36 | +54.8% | -$332.00 |
| $316.98 | +76.9% | -$332.00 |
| $356.60 | +99.0% | -$332.00 |
When traders use bear put spread on PAG
Bear put spreads on PAG reduce the cost of a bearish PAG stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
PAG thesis for this bear put spread
The market-implied 1-standard-deviation range for PAG extends from approximately $163.27 on the downside to $195.13 on the upside. A PAG bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on PAG, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current PAG IV rank near 2.72% 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 PAG at 31.00%. As a Consumer Cyclical name, PAG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAG-specific events.
PAG bear put spread positions are structurally moderately bearish; 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. PAG positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PAG alongside the broader basket even when PAG-specific fundamentals are unchanged. Long-premium structures like a bear put spread on PAG are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current PAG chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on PAG?
- A bear put spread on PAG is the bear put spread strategy applied to PAG (stock). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With PAG stock trading near $179.20, the strikes shown on this page are snapped to the nearest listed PAG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PAG bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the PAG bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 31.00%), the computed maximum profit is $668.00 per contract and the computed maximum loss is -$332.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PAG bear put spread?
- The breakeven for the PAG bear put spread priced on this page is roughly $176.68 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 PAG market-implied 1-standard-deviation expected move is approximately 8.89%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on PAG?
- Bear put spreads on PAG reduce the cost of a bearish PAG stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current PAG implied volatility affect this bear put spread?
- PAG ATM IV is at 31.00% with IV rank near 2.72%, 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.