How are RDW 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 RDW strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 110.47%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$245.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RDW strangle?

The breakeven for the RDW strangle priced on this page is roughly $9.05 and $15.45 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 RDW market-implied 1-standard-deviation expected move is approximately 31.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RDW implied volatility affect this strangle?

RDW ATM IV is at 110.47% with IV rank near 45.16%, 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.

RDW Strangle Strategy

RDW (Redwire Corp), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.

Redwire Corporation provides critical space solutions and space infrastructure for government and commercial customers in the United States, Europe, and internationally. It operates in two segments Space and Defense Tech. The company offers sensors and avionics systems, including star trackers and sun sensors, which are critical for accurate navigation and control of spacecraft; camera systems; infrared, space situational awareness, and position timing and navigation payloads; It also provides software suite that enables digital engineering and generation of high-fidelity, interactive modeling and simulations of individual components, entire spacecraft, and full constellations in a cloud-based environment. In addition, the company offers microgravity payloads, radio frequency systems, antennas, spacecraft platforms and missions, and in-space manufacturing and biotech facilities, as well as field-proven uncrewed airborne system (UAS) technology. Further, it provides combat-proven autonomous systems, optical sensors, advanced optics, resilient energy solutions, and radio frequency payloads, as well as provides intelligence, surveillance, and reconnaissance capabilities for customers including the U.S. Department of War, U.S.

RDW (Redwire Corp) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $2.61B, a beta of 2.94 versus the broader market, a 52-week range of 4.87-26.64, average daily share volume of 39.6M, a public-listing history dating back to 2021, approximately 1K full-time employees. These structural characteristics shape how RDW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.94 indicates RDW has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.

What is a strangle on RDW?

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 RDW snapshot

As of June 30, 2026, spot at $12.29, ATM IV 110.47%, IV rank 45.16%, expected move 31.67%. The strangle on RDW 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 31-day expiry.

Why this strangle structure on RDW specifically: RDW IV at 110.47% 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 31.67% (roughly $3.89 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDW expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDW should anchor to the underlying notional of $12.29 per share and to the trader's directional view on RDW stock.

RDW strangle setup

The RDW 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 RDW near $12.29, the first option leg uses a $13.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDW chain at a 31-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 RDW shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$13.00	$1.33
Buy 1	Put	$11.50	$1.13

RDW strangle risk and reward

Net Premium / Debit: -$245.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$245.00
Breakeven(s): $9.05, $15.45
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.

RDW strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on RDW. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-99.9%	+$904.00
$2.73	-77.8%	+$632.37
$5.44	-55.7%	+$360.74
$8.16	-33.6%	+$89.12
$10.88	-11.5%	-$182.51
$13.59	+10.6%	-$185.86
$16.31	+32.7%	+$85.77
$19.02	+54.8%	+$357.40
$21.74	+76.9%	+$629.03
$24.46	+99.0%	+$900.65

When traders use strangle on RDW

Strangles on RDW 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 RDW chain.

RDW thesis for this strangle

The market-implied 1-standard-deviation range for RDW extends from approximately $8.40 on the downside to $16.18 on the upside. A RDW 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 RDW IV rank near 45.16% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle thesis on RDW should anchor more to the directional view and the expected-move geometry. As a Industrials name, RDW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDW-specific events.

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

Frequently asked questions

What is a strangle on RDW?: A strangle on RDW is the strangle strategy applied to RDW (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 RDW stock trading near $12.29, the strikes shown on this page are snapped to the nearest listed RDW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RDW 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 RDW strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 110.47%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$245.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RDW strangle?: The breakeven for the RDW strangle priced on this page is roughly $9.05 and $15.45 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 RDW market-implied 1-standard-deviation expected move is approximately 31.67%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on RDW?: Strangles on RDW 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 RDW chain.
How does current RDW implied volatility affect this strangle?: RDW ATM IV is at 110.47% with IV rank near 45.16%, 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.