UNM Strangle Strategy
UNM (Unum Group), in the Financial Services sector, (Insurance - Life industry), listed on NYSE.
Unum Group, along with its various subsidiaries, specializes in delivering financial protection benefits, primarily operating across the United States, the United Kingdom, and Poland. The company's operations are organized into distinct segments: Unum US, Unum International, Colonial Life, and the Closed Block. Its extensive product portfolio encompasses group coverage, including long-term and short-term disability, life insurance, and accidental death and dismemberment. Additionally, Unum provides a range of supplemental and voluntary offerings like individual disability, various voluntary benefits, and dental and vision plans. Further offerings include policies addressing accidents, sickness, general disability, life coverage, cancer, and critical illness. Beyond these, Unum's services extend to group pension plans, individual life insurance, corporate-owned life insurance (COLI), and the management of reinsurance pools.
UNM (Unum Group) trades in the Financial Services sector, specifically Insurance - Life, with a market capitalization of approximately $14.40B, a trailing P/E of 18.92, a beta of 0.25 versus the broader market, a 52-week range of 68.28-93.22, average daily share volume of 1.4M, a public-listing history dating back to 1986, approximately 11K full-time employees. These structural characteristics shape how UNM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.25 indicates UNM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. UNM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a strangle on UNM?
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 UNM snapshot
As of June 30, 2026, spot at $89.65, ATM IV 22.80%, IV rank 25.26%, expected move 6.54%. The strangle on UNM 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 strangle structure on UNM specifically: UNM IV at 22.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a UNM strangle, with a market-implied 1-standard-deviation move of approximately 6.54% (roughly $5.86 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 UNM expiries trade a higher absolute premium for lower per-day decay. Position sizing on UNM should anchor to the underlying notional of $89.65 per share and to the trader's directional view on UNM stock.
UNM strangle setup
The UNM 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 UNM near $89.65, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UNM 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 UNM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $95.00 | $0.40 |
| Buy 1 | Put | $85.00 | $0.53 |
UNM strangle risk and reward
- Net Premium / Debit
- -$92.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$92.50
- Breakeven(s)
- $84.08, $95.93
- 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.
UNM strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on UNM. 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% | +$8,406.50 |
| $19.83 | -77.9% | +$6,424.40 |
| $39.65 | -55.8% | +$4,442.30 |
| $59.47 | -33.7% | +$2,460.20 |
| $79.29 | -11.6% | +$478.10 |
| $99.12 | +10.6% | +$319.00 |
| $118.94 | +32.7% | +$2,301.10 |
| $138.76 | +54.8% | +$4,283.20 |
| $158.58 | +76.9% | +$6,265.30 |
| $178.40 | +99.0% | +$8,247.40 |
When traders use strangle on UNM
Strangles on UNM 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 UNM chain.
UNM thesis for this strangle
The market-implied 1-standard-deviation range for UNM extends from approximately $83.79 on the downside to $95.51 on the upside. A UNM 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 UNM IV rank near 25.26% 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 UNM at 22.80%. As a Financial Services name, UNM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UNM-specific events.
UNM 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. UNM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UNM alongside the broader basket even when UNM-specific fundamentals are unchanged. Always rebuild the position from current UNM chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on UNM?
- A strangle on UNM is the strangle strategy applied to UNM (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 UNM stock trading near $89.65, the strikes shown on this page are snapped to the nearest listed UNM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UNM 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 UNM strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 22.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$92.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UNM strangle?
- The breakeven for the UNM strangle priced on this page is roughly $84.08 and $95.93 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 UNM market-implied 1-standard-deviation expected move is approximately 6.54%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on UNM?
- Strangles on UNM 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 UNM chain.
- How does current UNM implied volatility affect this strangle?
- UNM ATM IV is at 22.80% with IV rank near 25.26%, 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.