How are SWBI 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 SWBI straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 34.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$84.95 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SWBI straddle?

The breakeven for the SWBI straddle priced on this page is roughly $14.10 and $15.90 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 SWBI market-implied 1-standard-deviation expected move is approximately 9.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SWBI implied volatility affect this straddle?

SWBI ATM IV is at 34.80% with IV rank near 12.01%, 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.

SWBI Straddle Strategy

SWBI (Smith & Wesson Brands, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NASDAQ.

Smith & Wesson Brands, Inc. (SWBI) is a leading global enterprise engaged in the design, production, and worldwide sale of firearms. Their extensive product range features various handguns, including revolvers and semi-automatic pistols, along with long guns such as contemporary sporting rifles and bolt-action models. The company also offers related accessories like restraints (handcuffs) and sound suppressors, primarily under its well-known Smith & Wesson, M&P, and Gemtech labels. Beyond its core firearm manufacturing, SWBI provides a suite of specialized industrial services to other businesses. These capabilities encompass precision processes like forging, heat treating, rapid prototyping, tool fabrication, various finishing techniques, electroplating, advanced machining, and custom plastic injection molding. These services are delivered under the Smith & Wesson and Smith & Wesson Precision Components brand names.

SWBI (Smith & Wesson Brands, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $681.2M, a trailing P/E of 36.70, a beta of 0.86 versus the broader market, a 52-week range of 7.73-17.56, average daily share volume of 694K, a public-listing history dating back to 1999, approximately 2K full-time employees. These structural characteristics shape how SWBI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.86 places SWBI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 36.70 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. SWBI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a straddle on SWBI?

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 SWBI snapshot

As of June 30, 2026, spot at $15.02, ATM IV 34.80%, IV rank 12.01%, expected move 9.98%. The straddle on SWBI 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 17-day expiry.

Why this straddle structure on SWBI specifically: SWBI IV at 34.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a SWBI straddle, with a market-implied 1-standard-deviation move of approximately 9.98% (roughly $1.50 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SWBI expiries trade a higher absolute premium for lower per-day decay. Position sizing on SWBI should anchor to the underlying notional of $15.02 per share and to the trader's directional view on SWBI stock.

SWBI straddle setup

The SWBI 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 SWBI near $15.02, the first option leg uses a $15.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SWBI chain at a 17-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 SWBI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$15.00	$0.40
Buy 1	Put	$15.00	$0.50

SWBI straddle risk and reward

Net Premium / Debit: -$90.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$84.95
Breakeven(s): $14.10, $15.90
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.

SWBI straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on SWBI. 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%	+$1,409.00
$3.33	-77.8%	+$1,077.01
$6.65	-55.7%	+$745.02
$9.97	-33.6%	+$413.03
$13.29	-11.5%	+$81.04
$16.61	+10.6%	+$70.95
$19.93	+32.7%	+$402.94
$23.25	+54.8%	+$734.93
$26.57	+76.9%	+$1,066.92
$29.89	+99.0%	+$1,398.91

When traders use straddle on SWBI

Straddles on SWBI are pure-volatility plays that profit from large moves in either direction; traders typically buy SWBI straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.

SWBI thesis for this straddle

The market-implied 1-standard-deviation range for SWBI extends from approximately $13.52 on the downside to $16.52 on the upside. A SWBI 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 SWBI IV rank near 12.01% 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 SWBI at 34.80%. As a Industrials name, SWBI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SWBI-specific events.

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

Frequently asked questions

What is a straddle on SWBI?: A straddle on SWBI is the straddle strategy applied to SWBI (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 SWBI stock trading near $15.02, the strikes shown on this page are snapped to the nearest listed SWBI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are SWBI 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 SWBI straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 34.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$84.95 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SWBI straddle?: The breakeven for the SWBI straddle priced on this page is roughly $14.10 and $15.90 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 SWBI market-implied 1-standard-deviation expected move is approximately 9.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on SWBI?: Straddles on SWBI are pure-volatility plays that profit from large moves in either direction; traders typically buy SWBI 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 SWBI implied volatility affect this straddle?: SWBI ATM IV is at 34.80% with IV rank near 12.01%, 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.