How are PAGP 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 PAGP strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 18.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$87.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PAGP strangle?

The breakeven for the PAGP strangle priced on this page is roughly $22.13 and $26.88 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 PAGP market-implied 1-standard-deviation expected move is approximately 5.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PAGP implied volatility affect this strangle?

PAGP ATM IV is at 18.40% with IV rank near 1.62%, 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.

PAGP Strangle Strategy

PAGP (Plains GP Holdings, L.P.), in the Energy sector, (Oil & Gas Midstream industry), listed on NASDAQ.

Plains GP Holdings, L.P., through its subsidiary, Plains All American Pipeline, L.P., owns and operates midstream energy infrastructure in the United States and Canada. The company operates in two segments, Crude Oil and Natural Gas Liquids (NGLs). The company engages in the transportation of crude oil and NGLs on pipelines, gathering systems, and trucks. As of December 31, 2021, this segment owned and leased assets comprising 18,300 miles of crude oil and NGL pipelines and gathering systems; 38 million barrels of above-ground tank capacity; and 1,275 trailers. It engages in the provision of storage, terminalling, and throughput services primarily for crude oil, NGLs, and natural gas; NGL fractionation and isomerization services; and natural gas and condensate processing services. As of December 31, 2021, this segment owned and operated approximately 74 million barrels of crude oil storage capacity; 28 million barrels of NGL storage capacity; four natural gas processing plants; a condensate processing facility; nine fractionation plants; 16 NGL rail terminals; four marine facilities; and 110 miles of pipelines.

PAGP (Plains GP Holdings, L.P.) trades in the Energy sector, specifically Oil & Gas Midstream, with a market capitalization of approximately $4.65B, a trailing P/E of 23.87, a beta of 0.43 versus the broader market, a 52-week range of 16.68-24.76, average daily share volume of 1.9M, a public-listing history dating back to 2013, approximately 5K full-time employees. These structural characteristics shape how PAGP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.43 indicates PAGP has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. PAGP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on PAGP?

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 PAGP snapshot

As of May 15, 2026, spot at $24.58, ATM IV 18.40%, IV rank 1.62%, expected move 5.28%. The strangle on PAGP 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 98-day expiry.

Why this strangle structure on PAGP specifically: PAGP IV at 18.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a PAGP strangle, with a market-implied 1-standard-deviation move of approximately 5.28% (roughly $1.30 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PAGP expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAGP should anchor to the underlying notional of $24.58 per share and to the trader's directional view on PAGP stock.

PAGP strangle setup

The PAGP 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 PAGP near $24.58, the first option leg uses a $26.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAGP chain at a 98-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 PAGP shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$26.00	$0.43
Buy 1	Put	$23.00	$0.45

PAGP strangle risk and reward

Net Premium / Debit: -$87.50
Max Profit (per contract): Unbounded
Max Loss (per contract): -$87.50
Breakeven(s): $22.13, $26.88
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.

PAGP strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on PAGP. 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%	+$2,211.50
$5.44	-77.9%	+$1,668.13
$10.88	-55.7%	+$1,124.77
$16.31	-33.6%	+$581.40
$21.74	-11.5%	+$38.03
$27.18	+10.6%	+$30.33
$32.61	+32.7%	+$573.70
$38.05	+54.8%	+$1,117.07
$43.48	+76.9%	+$1,660.43
$48.91	+99.0%	+$2,203.80

When traders use strangle on PAGP

Strangles on PAGP 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 PAGP chain.

PAGP thesis for this strangle

The market-implied 1-standard-deviation range for PAGP extends from approximately $23.28 on the downside to $25.88 on the upside. A PAGP 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 PAGP IV rank near 1.62% 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 PAGP at 18.40%. As a Energy name, PAGP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAGP-specific events.

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

Frequently asked questions

What is a strangle on PAGP?: A strangle on PAGP is the strangle strategy applied to PAGP (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 PAGP stock trading near $24.58, the strikes shown on this page are snapped to the nearest listed PAGP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PAGP 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 PAGP strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 18.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$87.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PAGP strangle?: The breakeven for the PAGP strangle priced on this page is roughly $22.13 and $26.88 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 PAGP market-implied 1-standard-deviation expected move is approximately 5.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on PAGP?: Strangles on PAGP 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 PAGP chain.
How does current PAGP implied volatility affect this strangle?: PAGP ATM IV is at 18.40% with IV rank near 1.62%, 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.