TDW Straddle Strategy
TDW (Tidewater Inc.), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NYSE.
Tidewater Inc., together with its subsidiaries, provides offshore marine support and transportation services to the offshore energy industry through the operation of a fleet of marine service vessels worldwide. It provides services in support of offshore oil and natural gas exploration, field development, and production, as well as windfarm development and maintenance, including towing of and anchor handling for mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover, and production activities; offshore construction, and seismic and subsea support; geotechnical survey support for windfarm construction; and various specialized services, such as pipe and cable laying. The company operates and charters deepwater vessels, including platform supply and horsepower anchor handling tug supply vessels for use in transporting supplies and equipment from shore bases to deepwater and intermediate water depth offshore drilling rigs and production platforms; towing-supply vessels for use in intermediate and shallow waters; and crew boats, utility vessels, and offshore tugs to transport personnel and supplies from shore bases to offshore drilling rigs, platforms, and other installations. It also operates offshore tugs for use in tow floating drilling rigs and barges; and assisting in the docking of tankers, as well as in pipe and cable laying, and construction barges. The company serves oil and natural gas exploration, field development, and production companies; mid-sized and smaller independent exploration and production companies; foreign government-owned or government-controlled organizations, and other related companies; drilling contractors; and other companies, such as offshore construction, windfarm development, diving, and well stimulation companies. As of December 31, 2021, it owned 135 vessels.
TDW (Tidewater Inc.) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $4.03B, a trailing P/E of 13.49, a beta of 0.57 versus the broader market, a 52-week range of 38.24-93.13, average daily share volume of 891K, a public-listing history dating back to 1980, approximately 8K full-time employees. These structural characteristics shape how TDW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.57 indicates TDW has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a straddle on TDW?
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 TDW snapshot
As of May 15, 2026, spot at $82.07, ATM IV 49.80%, IV rank 27.43%, expected move 14.28%. The straddle on TDW 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 63-day expiry.
Why this straddle structure on TDW specifically: TDW IV at 49.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a TDW straddle, with a market-implied 1-standard-deviation move of approximately 14.28% (roughly $11.72 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TDW expiries trade a higher absolute premium for lower per-day decay. Position sizing on TDW should anchor to the underlying notional of $82.07 per share and to the trader's directional view on TDW stock.
TDW straddle setup
The TDW 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 TDW near $82.07, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TDW chain at a 63-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 TDW shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $7.85 |
| Buy 1 | Put | $80.00 | $5.35 |
TDW straddle risk and reward
- Net Premium / Debit
- -$1,320.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$1,318.69
- Breakeven(s)
- $66.80, $93.20
- 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.
TDW straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on TDW. 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% | +$6,679.00 |
| $18.16 | -77.9% | +$4,864.50 |
| $36.30 | -55.8% | +$3,049.99 |
| $54.45 | -33.7% | +$1,235.49 |
| $72.59 | -11.6% | -$579.01 |
| $90.74 | +10.6% | -$246.49 |
| $108.88 | +32.7% | +$1,568.02 |
| $127.03 | +54.8% | +$3,382.52 |
| $145.17 | +76.9% | +$5,197.02 |
| $163.32 | +99.0% | +$7,011.52 |
When traders use straddle on TDW
Straddles on TDW are pure-volatility plays that profit from large moves in either direction; traders typically buy TDW straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
TDW thesis for this straddle
The market-implied 1-standard-deviation range for TDW extends from approximately $70.35 on the downside to $93.79 on the upside. A TDW 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 TDW IV rank near 27.43% 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 TDW at 49.80%. As a Energy name, TDW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TDW-specific events.
TDW 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. TDW positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TDW alongside the broader basket even when TDW-specific fundamentals are unchanged. Always rebuild the position from current TDW chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on TDW?
- A straddle on TDW is the straddle strategy applied to TDW (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 TDW stock trading near $82.07, the strikes shown on this page are snapped to the nearest listed TDW chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TDW 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 TDW straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 49.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,318.69 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TDW straddle?
- The breakeven for the TDW straddle priced on this page is roughly $66.80 and $93.20 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 TDW market-implied 1-standard-deviation expected move is approximately 14.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on TDW?
- Straddles on TDW are pure-volatility plays that profit from large moves in either direction; traders typically buy TDW 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 TDW implied volatility affect this straddle?
- TDW ATM IV is at 49.80% with IV rank near 27.43%, 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.