KDK Straddle Strategy
KDK (Kodiak AI, Inc. Common Stock), in the Technology sector, (Software - Application industry), listed on NASDAQ.
Kodiak AI, Inc. develops a technology software. The Company offers AI-powered ground autonomy solutions for vehicles to navigate highways, surface streets, and off-road terrain through multi-sensor architecture transportation technology for trucking, defense, and industrial industries.
KDK (Kodiak AI, Inc. Common Stock) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $1.47B, a beta of 0.40 versus the broader market, a 52-week range of 5.43-11.35, average daily share volume of 671K, a public-listing history dating back to 2025, approximately 271 full-time employees. These structural characteristics shape how KDK stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.40 indicates KDK 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 KDK?
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 KDK snapshot
As of May 13, 2026, spot at $8.13, ATM IV 76.50%, IV rank 16.38%, expected move 21.93%. The straddle on KDK 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 63-day expiry.
Why this straddle structure on KDK specifically: KDK IV at 76.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a KDK straddle, with a market-implied 1-standard-deviation move of approximately 21.93% (roughly $1.78 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KDK expiries trade a higher absolute premium for lower per-day decay. Position sizing on KDK should anchor to the underlying notional of $8.13 per share and to the trader's directional view on KDK stock.
KDK straddle setup
The KDK 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 KDK near $8.13, the first option leg uses a $8.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KDK chain at a 63-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 KDK shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $8.00 | $0.70 |
| Buy 1 | Put | $8.00 | $1.18 |
KDK straddle risk and reward
- Net Premium / Debit
- -$187.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$186.25
- Breakeven(s)
- $6.13, $9.88
- 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.
KDK straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on KDK. 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 | -99.9% | +$611.50 |
| $1.81 | -77.8% | +$431.85 |
| $3.60 | -55.7% | +$252.20 |
| $5.40 | -33.6% | +$72.56 |
| $7.20 | -11.5% | -$107.09 |
| $8.99 | +10.6% | -$88.26 |
| $10.79 | +32.7% | +$91.39 |
| $12.59 | +54.8% | +$271.04 |
| $14.38 | +76.9% | +$450.69 |
| $16.18 | +99.0% | +$630.33 |
When traders use straddle on KDK
Straddles on KDK are pure-volatility plays that profit from large moves in either direction; traders typically buy KDK straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
KDK thesis for this straddle
The market-implied 1-standard-deviation range for KDK extends from approximately $6.35 on the downside to $9.91 on the upside. A KDK 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 KDK IV rank near 16.38% 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 KDK at 76.50%. As a Technology name, KDK options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KDK-specific events.
KDK 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. KDK positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KDK alongside the broader basket even when KDK-specific fundamentals are unchanged. Always rebuild the position from current KDK chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on KDK?
- A straddle on KDK is the straddle strategy applied to KDK (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 KDK stock trading near $8.13, the strikes shown on this page are snapped to the nearest listed KDK chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KDK 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 KDK straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 76.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$186.25 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KDK straddle?
- The breakeven for the KDK straddle priced on this page is roughly $6.13 and $9.88 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 KDK market-implied 1-standard-deviation expected move is approximately 21.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on KDK?
- Straddles on KDK are pure-volatility plays that profit from large moves in either direction; traders typically buy KDK 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 KDK implied volatility affect this straddle?
- KDK ATM IV is at 76.50% with IV rank near 16.38%, 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.