LABU Iron Condor 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 iron condor on LABU?
An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes.
LABU snapshot
As of August 14, 2026, spot at $275.67, ATM IV 82.63%, IV rank 25.19%, expected move 23.69%. The iron condor 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 iron condor 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 iron condor 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 iron condor setup
The LABU iron condor 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 $290.00 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 | Call | $290.00 | $18.00 |
| Buy 1 | Call | $302.50 | $13.60 |
| Sell 1 | Put | $262.50 | $19.05 |
| Buy 1 | Put | $247.50 | $13.50 |
LABU iron condor risk and reward
- Net Premium / Debit
- +$995.00
- Max Profit (per contract)
- $995.00
- Max Loss (per contract)
- -$505.00
- Breakeven(s)
- $252.55, $299.95
- Risk / Reward Ratio
- 1.970
Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit.
LABU iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor 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% | -$505.00 |
| $60.96 | -77.9% | -$505.00 |
| $121.91 | -55.8% | -$505.00 |
| $182.86 | -33.7% | -$505.00 |
| $243.81 | -11.6% | -$505.00 |
| $304.77 | +10.6% | -$255.00 |
| $365.72 | +32.7% | -$255.00 |
| $426.67 | +54.8% | -$255.00 |
| $487.62 | +76.9% | -$255.00 |
| $548.57 | +99.0% | -$255.00 |
When traders use iron condor on LABU
Iron condors on LABU are a delta-neutral premium-collection structure that profits if LABU etf stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
LABU thesis for this iron condor
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 iron condor is a delta-neutral premium-collection structure that pays off when LABU stays inside the inner short strikes through expiration; the wing width should reflect the trader's tolerance for the maximum loss scenario where the underlying breaches an outer strike. 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 iron condor positions are structurally neutral / range-bound; 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 iron condor 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 iron condor on LABU?
- A iron condor on LABU is the iron condor strategy applied to LABU (etf). The strategy is structurally neutral / range-bound: An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes. 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 iron condor max profit and max loss calculated?
- Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit. For the LABU iron condor priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 82.63%), the computed maximum profit is $995.00 per contract and the computed maximum loss is -$505.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LABU iron condor?
- The breakeven for the LABU iron condor priced on this page is roughly $252.55 and $299.95 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 iron condor on LABU?
- Iron condors on LABU are a delta-neutral premium-collection structure that profits if LABU etf stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current LABU implied volatility affect this iron condor?
- 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.