PHM Straddle Strategy
PHM (PulteGroup, Inc.), in the Consumer Cyclical sector, (Residential Construction industry), listed on NYSE.
PulteGroup, Inc. engages in the homebuilding business. The firm is also involved in mortgage banking and title and insurance brokerage operations. It operates through the Homebuilding and Financial services business segments. The Homebuilding segment includes operations from Connecticut, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Virginia, Georgia, North Carolina, South Carolina, Tennessee, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, Ohio, Texas, Arizona, California, Nevada, New Mexico, and Washington. The Financial Services segment is composed of mortgage banking and title operations. The company was founded by William J.
PHM (PulteGroup, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $24.93B, a trailing P/E of 12.99, a beta of 1.20 versus the broader market, a 52-week range of 108.49-144.5, average daily share volume of 1.9M, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how PHM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.20 places PHM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PHM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on PHM?
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.
PHM snapshot
As of August 14, 2026, spot at $130.19, ATM IV 32.67%, IV rank 24.78%, expected move 9.37%. The straddle on PHM below is built from the August 14, 2026 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 straddle structure on PHM specifically: PHM IV at 32.67% is on the cheap side of its 1-year range, which favors premium-buying structures like a PHM straddle, with a market-implied 1-standard-deviation move of approximately 9.37% (roughly $12.19 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 PHM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PHM should anchor to the underlying notional of $130.19 per share and to the trader's directional view on PHM stock.
PHM straddle setup
The PHM straddle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PHM at $130.19 on that close, the first option leg uses a $130.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PHM 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 PHM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $130.00 | $4.90 |
| Buy 1 | Put | $130.00 | $4.35 |
PHM straddle risk and reward
- Net Premium / Debit
- -$925.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$879.08
- Breakeven(s)
- $120.75, $139.25
- 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.
PHM straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on PHM. 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% | +$12,074.00 |
| $28.79 | -77.9% | +$9,195.54 |
| $57.58 | -55.8% | +$6,317.08 |
| $86.36 | -33.7% | +$3,438.61 |
| $115.15 | -11.6% | +$560.15 |
| $143.93 | +10.6% | +$468.31 |
| $172.72 | +32.7% | +$3,346.77 |
| $201.50 | +54.8% | +$6,225.24 |
| $230.29 | +76.9% | +$9,103.70 |
| $259.07 | +99.0% | +$11,982.16 |
When traders use straddle on PHM
Straddles on PHM are pure-volatility plays that profit from large moves in either direction; traders typically buy PHM straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
PHM thesis for this straddle
The market-implied 1-standard-deviation range for PHM extends from approximately $118.00 on the downside to $142.38 on the upside. A PHM 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 PHM IV rank near 24.78% 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 PHM at 32.67%. As a Consumer Cyclical name, PHM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PHM-specific events.
PHM 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. PHM positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PHM alongside the broader basket even when PHM-specific fundamentals are unchanged. Always rebuild the position from current PHM chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on PHM?
- A straddle on PHM is the straddle strategy applied to PHM (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 PHM stock at $130.19 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed PHM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PHM 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 PHM straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.67%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$879.08 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PHM straddle?
- The breakeven for the PHM straddle priced on this page is roughly $120.75 and $139.25 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The PHM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.37%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on PHM?
- Straddles on PHM are pure-volatility plays that profit from large moves in either direction; traders typically buy PHM 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 PHM implied volatility affect this straddle?
- PHM ATM IV is at 32.67% with IV rank near 24.78%, 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.