LABU Cash-Secured Put Strategy
LABU (Direxion Daily S&P Biotech Bull 3X Shares), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Direxion Shares ETF Trust - Direxion Daily S&P Biotech Bull 3X ETF is an exchange traded fund launched by Direxion Investments. It is managed by Rafferty Asset Management, LLC. It invests in public equity markets of the United States. It invests directly, through derivatives and through other funds in stocks of companies operating across health care, pharmaceuticals, biotechnology and life sciences sectors. It uses derivatives such as futures, swaps to create its portfolio. The fund invests in growth and value stocks of companies across diversified market capitalization.
LABU (Direxion Daily S&P Biotech Bull 3X Shares) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.53B, a beta of 3.05 versus the broader market, a 52-week range of 65.82-333, average daily share volume of 549K, a public-listing history dating back to 2015. These structural characteristics shape how LABU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.05 indicates LABU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. LABU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a cash-secured put on LABU?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
LABU snapshot
As of August 14, 2026, spot at $275.67, ATM IV 82.63%, IV rank 25.19%, expected move 23.69%. The cash-secured put on LABU 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 28-day expiry.
Why this cash-secured put structure on LABU specifically: LABU IV at 82.63% is on the cheap side of its 1-year range, which means a premium-selling LABU cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 23.69% (roughly $65.31 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LABU expiries trade a higher absolute premium for lower per-day decay. Position sizing on LABU should anchor to the underlying notional of $275.67 per share and to the trader's directional view on LABU etf.
LABU cash-secured put setup
The LABU cash-secured put 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 LABU at $275.67 on that close, the first option leg uses a $262.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LABU chain at a 28-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 LABU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $262.50 | $19.05 |
LABU cash-secured put risk and reward
- Net Premium / Debit
- +$1,905.00
- Max Profit (per contract)
- $1,905.00
- Max Loss (per contract)
- -$24,344.00
- Breakeven(s)
- $243.45
- Risk / Reward Ratio
- 0.078
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
LABU cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on LABU. 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% | -$24,344.00 |
| $60.96 | -77.9% | -$18,248.89 |
| $121.91 | -55.8% | -$12,153.79 |
| $182.86 | -33.7% | -$6,058.68 |
| $243.81 | -11.6% | +$36.42 |
| $304.77 | +10.6% | +$1,905.00 |
| $365.72 | +32.7% | +$1,905.00 |
| $426.67 | +54.8% | +$1,905.00 |
| $487.62 | +76.9% | +$1,905.00 |
| $548.57 | +99.0% | +$1,905.00 |
When traders use cash-secured put on LABU
Cash-secured puts on LABU earn premium while a trader waits to acquire LABU etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LABU.
LABU thesis for this cash-secured put
The market-implied 1-standard-deviation range for LABU extends from approximately $210.36 on the downside to $340.98 on the upside. A LABU cash-secured put lets a trader earn premium while waiting to acquire LABU at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current LABU IV rank near 25.19% 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 LABU at 82.63%. As a Financial Services name, LABU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LABU-specific events.
LABU cash-secured put positions are structurally neutral to slightly bullish; 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. LABU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LABU alongside the broader basket even when LABU-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on LABU carry tail risk when realized volatility exceeds the implied move; review historical LABU earnings reactions and macro stress periods before sizing. Always rebuild the position from current LABU chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on LABU?
- A cash-secured put on LABU is the cash-secured put strategy applied to LABU (etf). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. With LABU etf at $275.67 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LABU chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are LABU cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the LABU cash-secured put priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 82.63%), the computed maximum profit is $1,905.00 per contract and the computed maximum loss is -$24,344.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LABU cash-secured put?
- The breakeven for the LABU cash-secured put priced on this page is roughly $243.45 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 LABU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 23.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a cash-secured put on LABU?
- Cash-secured puts on LABU earn premium while a trader waits to acquire LABU etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LABU.
- How does current LABU implied volatility affect this cash-secured put?
- LABU ATM IV is at 82.63% with IV rank near 25.19%, 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.