ELMD Straddle Strategy

ELMD (Electromed, Inc.), in the Healthcare sector, (Medical - Devices industry), listed on AMEX.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy and related products that apply high frequency chest wall oscillation (HFCWO) therapy in pulmonary care for patients of various ages in the United States and internationally. The company offers SmartVest airway clearance system; SmartVest SQL System that consists of an inflatable therapy garment, a programmable air pulse generator, and a patented single-hose that delivers air pulses from the generator to the garment; and SmartVest Connect, a wireless technology with personalized HFCWO therapy management portal for patients with compromised pulmonary function. It also provides single patient use SmartVest and SmartVest Wrap products for health care providers in the acute care setting. The company offers its products primarily to home health care market for patients with bronchiectasis, cystic fibrosis, and neuromuscular disease. Electromed, Inc. markets its products primarily to physicians and health care providers, as well as directly to patients. The company was incorporated in 1992 and is headquartered in New Prague, Minnesota.

ELMD (Electromed, Inc.) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $281.6M, a trailing P/E of 27.66, a beta of 0.39 versus the broader market, a 52-week range of 17.73-34.43, average daily share volume of 48K, a public-listing history dating back to 2010, approximately 174 full-time employees. These structural characteristics shape how ELMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.39 indicates ELMD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a straddle on ELMD?

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 ELMD snapshot

As of May 15, 2026, spot at $35.42, ATM IV 61.80%, IV rank 27.80%, expected move 17.72%. The straddle on ELMD 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 ELMD specifically: ELMD IV at 61.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a ELMD straddle, with a market-implied 1-standard-deviation move of approximately 17.72% (roughly $6.28 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 ELMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on ELMD should anchor to the underlying notional of $35.42 per share and to the trader's directional view on ELMD stock.

ELMD straddle setup

The ELMD 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 ELMD near $35.42, the first option leg uses a $35.42 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ELMD 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 ELMD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$35.42	N/A
Buy 1	Put	$35.42	N/A

ELMD straddle risk and reward

Net Premium / Debit: N/A
Max Profit (per contract): Unbounded
Max Loss (per contract): Unbounded
Breakeven(s): None on modeled curve
Risk / Reward Ratio: N/A

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.

ELMD straddle payoff curve

Modeled P&L at expiration across a range of underlying prices for the straddle on ELMD. 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.

When traders use straddle on ELMD

Straddles on ELMD are pure-volatility plays that profit from large moves in either direction; traders typically buy ELMD straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.

ELMD thesis for this straddle

The market-implied 1-standard-deviation range for ELMD extends from approximately $29.14 on the downside to $41.70 on the upside. A ELMD 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 ELMD IV rank near 27.80% 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 ELMD at 61.80%. As a Healthcare name, ELMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ELMD-specific events.

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

Frequently asked questions

What is a straddle on ELMD?: A straddle on ELMD is the straddle strategy applied to ELMD (stock). 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 ELMD stock trading near $35.42, the strikes shown on this page are snapped to the nearest listed ELMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ELMD 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 ELMD straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 61.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ELMD straddle?: The breakeven for the ELMD straddle priced on this page is no defined breakeven on the modeled curve 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 ELMD market-implied 1-standard-deviation expected move is approximately 17.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on ELMD?: Straddles on ELMD are pure-volatility plays that profit from large moves in either direction; traders typically buy ELMD 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 ELMD implied volatility affect this straddle?: ELMD ATM IV is at 61.80% with IV rank near 27.80%, 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.