SR Strangle Strategy
SR (Spire Inc.), in the Utilities sector, (Regulated Gas industry), listed on NYSE.
Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates in two segments, Gas Utility and Gas Marketing. It is also involved in the marketing of natural gas. In addition, the company engages in the transportation of propane through its propane pipeline; compression of natural gas; risk management; and other activities. Further, it provides physical natural gas storage services. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016.
SR (Spire Inc.) trades in the Utilities sector, specifically Regulated Gas, with a market capitalization of approximately $5.06B, a trailing P/E of 14.09, a beta of 0.58 versus the broader market, a 52-week range of 71.24-95.31, average daily share volume of 376K, a public-listing history dating back to 1973, approximately 3K full-time employees. These structural characteristics shape how SR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.58 indicates SR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. SR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on SR?
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 SR snapshot
As of May 15, 2026, spot at $85.24, ATM IV 19.10%, IV rank 3.29%, expected move 5.48%. The strangle on SR 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 34-day expiry.
Why this strangle structure on SR specifically: SR IV at 19.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a SR strangle, with a market-implied 1-standard-deviation move of approximately 5.48% (roughly $4.67 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SR expiries trade a higher absolute premium for lower per-day decay. Position sizing on SR should anchor to the underlying notional of $85.24 per share and to the trader's directional view on SR stock.
SR strangle setup
The SR 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 SR near $85.24, the first option leg uses a $89.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SR chain at a 34-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 SR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $89.50 | N/A |
| Buy 1 | Put | $80.98 | N/A |
SR strangle 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 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.
SR strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on SR. 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 strangle on SR
Strangles on SR 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 SR chain.
SR thesis for this strangle
The market-implied 1-standard-deviation range for SR extends from approximately $80.57 on the downside to $89.91 on the upside. A SR 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 SR IV rank near 3.29% 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 SR at 19.10%. As a Utilities name, SR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SR-specific events.
SR 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. SR positions also carry Utilities sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SR alongside the broader basket even when SR-specific fundamentals are unchanged. Always rebuild the position from current SR chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on SR?
- A strangle on SR is the strangle strategy applied to SR (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 SR stock trading near $85.24, the strikes shown on this page are snapped to the nearest listed SR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SR 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 SR strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 19.10%), 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 SR strangle?
- The breakeven for the SR strangle 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 SR market-implied 1-standard-deviation expected move is approximately 5.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on SR?
- Strangles on SR 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 SR chain.
- How does current SR implied volatility affect this strangle?
- SR ATM IV is at 19.10% with IV rank near 3.29%, 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.