SGU Straddle Strategy
SGU (Star Group, L.P.), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.
Star Group, L.P., together with its subsidiaries, provides home heating oil and propane products and services to residential and commercial customers in the United States. It offers gasoline and diesel fuel; and installs, maintains, and repairs heating and air conditioning equipment and ancillary services. As of September 30, 2025, the company served approximately 406,400 full-service residential and commercial home heating oil and propane customers and 63,200 customers on a delivery only basis. It sells gasoline and diesel fuel to approximately 27,700 customers. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. The company was incorporated in 1995 and is based in Stamford, Connecticut.
SGU (Star Group, L.P.) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $424.5M, a trailing P/E of 5.00, a beta of 0.32 versus the broader market, a 52-week range of 11.37-13.53, average daily share volume of 23K, a public-listing history dating back to 1995, approximately 3K full-time employees. These structural characteristics shape how SGU stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.32 indicates SGU has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 5.00 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. SGU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on SGU?
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 SGU snapshot
As of June 29, 2026, spot at $12.98, ATM IV 41.80%, IV rank 6.10%, expected move 11.98%. The straddle on SGU 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 straddle structure on SGU specifically: SGU IV at 41.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a SGU straddle, with a market-implied 1-standard-deviation move of approximately 11.98% (roughly $1.56 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 SGU expiries trade a higher absolute premium for lower per-day decay. Position sizing on SGU should anchor to the underlying notional of $12.98 per share and to the trader's directional view on SGU stock.
SGU straddle setup
The SGU 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 SGU near $12.98, the first option leg uses a $12.98 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SGU 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 SGU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $12.98 | N/A |
| Buy 1 | Put | $12.98 | N/A |
SGU straddle risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
SGU straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on SGU. 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.
When traders use straddle on SGU
Straddles on SGU are pure-volatility plays that profit from large moves in either direction; traders typically buy SGU straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
SGU thesis for this straddle
The market-implied 1-standard-deviation range for SGU extends from approximately $11.42 on the downside to $14.54 on the upside. A SGU 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 SGU IV rank near 6.10% 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 SGU at 41.80%. As a Energy name, SGU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SGU-specific events.
SGU 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. SGU positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SGU alongside the broader basket even when SGU-specific fundamentals are unchanged. Always rebuild the position from current SGU chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on SGU?
- A straddle on SGU is the straddle strategy applied to SGU (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 SGU stock trading near $12.98, the strikes shown on this page are snapped to the nearest listed SGU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SGU 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 SGU straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 41.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SGU straddle?
- The breakeven for the SGU straddle priced on this page is no defined breakeven on the modeled curve 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 SGU market-implied 1-standard-deviation expected move is approximately 11.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on SGU?
- Straddles on SGU are pure-volatility plays that profit from large moves in either direction; traders typically buy SGU 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 SGU implied volatility affect this straddle?
- SGU ATM IV is at 41.80% with IV rank near 6.10%, 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.