XHS Straddle Strategy
XHS (State Street SPDR S&P Health Care Services ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The State Street SPDR S&P Health Care Services ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of S&P Health Care Services Select Industry Index (the "Index")Seeks to provide exposure to health care services segment of the S&P TMI, which comprises the following sub-industries: Health Care Distributors, Health Care Facilities, Health Care Services, and Managed Health CareSeeks to track a modified equal weighted index which provides the potential for unconcentrated industry exposure across large, mid and small cap stocksAllows investors to take strategic or tactical positions at a more targeted level than traditional sector based investing
XHS (State Street SPDR S&P Health Care Services ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $84.6M, a beta of 1.10 versus the broader market, a 52-week range of 87.64-113.79, average daily share volume of 6K, a public-listing history dating back to 2011. These structural characteristics shape how XHS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places XHS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XHS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on XHS?
A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration.
Current XHS snapshot
As of May 15, 2026, spot at $112.63, ATM IV 20.10%, IV rank 1.10%, expected move 5.76%. The straddle on XHS 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 34-day expiry.
Why this straddle structure on XHS specifically: XHS IV at 20.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a XHS straddle, with a market-implied 1-standard-deviation move of approximately 5.76% (roughly $6.49 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated XHS expiries trade a higher absolute premium for lower per-day decay. Position sizing on XHS should anchor to the underlying notional of $112.63 per share and to the trader's directional view on XHS etf.
XHS straddle setup
The XHS straddle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With XHS near $112.63, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XHS chain at a 34-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 XHS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $115.00 | $1.70 |
| Buy 1 | Put | $115.00 | $3.88 |
XHS straddle risk and reward
- Net Premium / Debit
- -$557.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$511.02
- Breakeven(s)
- $109.43, $120.58
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit.
XHS straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on XHS. 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% | +$10,941.50 |
| $24.91 | -77.9% | +$8,451.30 |
| $49.81 | -55.8% | +$5,961.10 |
| $74.72 | -33.7% | +$3,470.90 |
| $99.62 | -11.6% | +$980.70 |
| $124.52 | +10.6% | +$394.51 |
| $149.42 | +32.7% | +$2,884.71 |
| $174.32 | +54.8% | +$5,374.91 |
| $199.23 | +76.9% | +$7,865.11 |
| $224.13 | +99.0% | +$10,355.31 |
When traders use straddle on XHS
Straddles on XHS are pure-volatility plays that profit from large moves in either direction; traders typically buy XHS straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
XHS thesis for this straddle
The market-implied 1-standard-deviation range for XHS extends from approximately $106.14 on the downside to $119.12 on the upside. A XHS long straddle is a pure-volatility play: it profits when the underlying moves far enough from the strike in either direction to overcome the combined call plus put debit, regardless of direction. Current XHS IV rank near 1.10% 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 XHS at 20.10%. As a Financial Services name, XHS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XHS-specific events.
XHS straddle positions are structurally neutral / high-volatility (long premium); 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. XHS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XHS alongside the broader basket even when XHS-specific fundamentals are unchanged. Always rebuild the position from current XHS chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on XHS?
- A straddle on XHS is the straddle strategy applied to XHS (etf). The strategy is structurally neutral / high-volatility (long premium): A long straddle buys an ATM call and an ATM put at the same strike, profiting from a large move in either direction; max loss equals the combined debit when the underlying pins to the strike at expiration. With XHS etf trading near $112.63, the strikes shown on this page are snapped to the nearest listed XHS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are XHS straddle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the strike minus the combined call plus put debit (reached at zero). Max loss equals the combined debit times 100 (reached when the underlying pins to the strike). Two breakevens at strike plus debit and strike minus debit. For the XHS straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 20.10%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$511.02 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a XHS straddle?
- The breakeven for the XHS straddle priced on this page is roughly $109.43 and $120.58 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 XHS market-implied 1-standard-deviation expected move is approximately 5.76%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on XHS?
- Straddles on XHS are pure-volatility plays that profit from large moves in either direction; traders typically buy XHS straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
- How does current XHS implied volatility affect this straddle?
- XHS ATM IV is at 20.10% with IV rank near 1.10%, 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.