How are THG 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 THG strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 17.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,000.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a THG strangle?

The breakeven for the THG strangle priced on this page is roughly $175.00 and $210.00 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 THG market-implied 1-standard-deviation expected move is approximately 5.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current THG implied volatility affect this strangle?

THG ATM IV is at 17.90% with IV rank near 1.07%, 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.

THG Strangle Strategy

THG (The Hanover Insurance Group, Inc.), in the Financial Services sector, (Insurance - Property & Casualty industry), listed on NYSE.

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates through three segments: Commercial Lines, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, and workers' compensation insurance products, as well as management and professional liability, marine, specialty industrial and commercial property, monoline general liability, surety, umbrella, fidelity, crime, and other commercial coverages. The Personal Lines segment provides personal automobile and homeowner's coverages, as well as other personal coverages, such as personal umbrella, inland marine, fire, personal watercraft, personal cyber, and other miscellaneous coverages. The Other segment markets investment management services to institutions, pension funds, and other organizations. The Hanover Insurance Group, Inc. markets its products and services through independent agents and brokers.

THG (The Hanover Insurance Group, Inc.) trades in the Financial Services sector, specifically Insurance - Property & Casualty, with a market capitalization of approximately $6.62B, a trailing P/E of 9.32, a beta of 0.32 versus the broader market, a 52-week range of 160.7-191.66, average daily share volume of 288K, a public-listing history dating back to 1995, approximately 5K full-time employees. These structural characteristics shape how THG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.32 indicates THG 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 9.32 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. THG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on THG?

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 THG snapshot

As of May 15, 2026, spot at $194.88, ATM IV 17.90%, IV rank 1.07%, expected move 5.13%. The strangle on THG 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 98-day expiry.

Why this strangle structure on THG specifically: THG IV at 17.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a THG strangle, with a market-implied 1-standard-deviation move of approximately 5.13% (roughly $10.00 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated THG expiries trade a higher absolute premium for lower per-day decay. Position sizing on THG should anchor to the underlying notional of $194.88 per share and to the trader's directional view on THG stock.

THG strangle setup

The THG 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 THG near $194.88, the first option leg uses a $200.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed THG chain at a 98-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 THG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$200.00	$5.95
Buy 1	Put	$185.00	$4.05

THG strangle risk and reward

Net Premium / Debit: -$1,000.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$1,000.00
Breakeven(s): $175.00, $210.00
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.

THG strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on THG. 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%	+$17,499.00
$43.10	-77.9%	+$13,190.21
$86.19	-55.8%	+$8,881.41
$129.27	-33.7%	+$4,572.62
$172.36	-11.6%	+$263.82
$215.45	+10.6%	+$544.97
$258.54	+32.7%	+$4,853.76
$301.63	+54.8%	+$9,162.56
$344.71	+76.9%	+$13,471.35
$387.80	+99.0%	+$17,780.15

When traders use strangle on THG

Strangles on THG 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 THG chain.

THG thesis for this strangle

The market-implied 1-standard-deviation range for THG extends from approximately $184.88 on the downside to $204.88 on the upside. A THG 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 THG IV rank near 1.07% 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 THG at 17.90%. As a Financial Services name, THG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to THG-specific events.

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

Frequently asked questions

What is a strangle on THG?: A strangle on THG is the strangle strategy applied to THG (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 THG stock trading near $194.88, the strikes shown on this page are snapped to the nearest listed THG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are THG 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 THG strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 17.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$1,000.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a THG strangle?: The breakeven for the THG strangle priced on this page is roughly $175.00 and $210.00 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 THG market-implied 1-standard-deviation expected move is approximately 5.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a strangle on THG?: Strangles on THG 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 THG chain.
How does current THG implied volatility affect this strangle?: THG ATM IV is at 17.90% with IV rank near 1.07%, 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.