How are WES 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 WES strangle priced from the August 14, 2026 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 -$25.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a WES strangle?

The breakeven for the WES strangle priced on this page is roughly $46.75 and $50.25 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The WES market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current WES implied volatility affect this strangle?

WES ATM IV is at 17.90% with IV rank near 26.82%, 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.

WES Strangle Strategy

WES (Western Midstream Partners, LP), in the Energy sector, (Oil & Gas Midstream industry), listed on NYSE.

Western Midstream Partners, LP, an energy infrastructure company operating with its subsidiaries, primarily acquires, owns, develops, and manages assets across the United States. Its core functions include the collection, compression, treatment, processing, and transportation of natural gas. The firm also handles the gathering, stabilization, and conveyance of condensate, natural gas liquids (NGLs), and crude oil, alongside the collection and disposal of water generated during production. Additionally, it engages in the buying and selling of natural gas, NGLs, and condensate. Western Midstream maintains operations in significant regions such as Texas, New Mexico, the Rocky Mountains, and north-central Pennsylvania. Western Midstream Holdings, LLC functions as its general partner.

WES (Western Midstream Partners, LP) trades in the Energy sector, specifically Oil & Gas Midstream, with a market capitalization of approximately $19.90B, a trailing P/E of 15.16, a beta of 0.66 versus the broader market, a 52-week range of 36.9-48.82, average daily share volume of 1.2M, a public-listing history dating back to 2012, approximately 2K full-time employees. These structural characteristics shape how WES stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.66 indicates WES has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. WES pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a strangle on WES?

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.

WES snapshot

As of August 14, 2026, spot at $48.98, ATM IV 17.90%, IV rank 26.82%, expected move 5.13%. The strangle on WES below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 7-day expiry.

Why this strangle structure on WES specifically: WES IV at 17.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a WES strangle, with a market-implied 1-standard-deviation move of approximately 5.13% (roughly $2.51 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated WES expiries trade a higher absolute premium for lower per-day decay. Position sizing on WES should anchor to the underlying notional of $48.98 per share and to the trader's directional view on WES stock.

WES strangle setup

The WES strangle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With WES at $48.98 on that close, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WES chain at a 7-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 WES shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$50.00	$0.13
Buy 1	Put	$47.00	$0.13

WES strangle risk and reward

Net Premium / Debit: -$25.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$25.00
Breakeven(s): $46.75, $50.25
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.

WES strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on WES. 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	-100.0%	+$4,674.00
$10.84	-77.9%	+$3,591.14
$21.67	-55.8%	+$2,508.27
$32.50	-33.7%	+$1,425.41
$43.32	-11.5%	+$342.54
$54.15	+10.6%	+$390.32
$64.98	+32.7%	+$1,473.19
$75.81	+54.8%	+$2,556.05
$86.64	+76.9%	+$3,638.91
$97.47	+99.0%	+$4,721.78

When traders use strangle on WES

Strangles on WES 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 WES chain.

WES thesis for this strangle

The market-implied 1-standard-deviation range for WES extends from approximately $46.47 on the downside to $51.49 on the upside. A WES 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 WES IV rank near 26.82% 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 WES at 17.90%. As a Energy name, WES options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WES-specific events.

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

Frequently asked questions

What is a strangle on WES?: A strangle on WES is the strangle strategy applied to WES (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 WES stock at $48.98 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed WES chain strike and the premiums come straight from that session's bid/ask midpoint.
How are WES 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 WES strangle priced from the August 14, 2026 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 -$25.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a WES strangle?: The breakeven for the WES strangle priced on this page is roughly $46.75 and $50.25 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The WES market-implied 1-standard-deviation expected move in the same options snapshot 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 WES?: Strangles on WES 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 WES chain.
How does current WES implied volatility affect this strangle?: WES ATM IV is at 17.90% with IV rank near 26.82%, 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.