KOD Straddle Strategy
KOD (Kodiak Sciences Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Kodiak Sciences Inc., a clinical stage biopharmaceutical company, researches, develops, and commercializes therapeutics to treat retinal diseases. Its lead product candidate is KSI-301, an anti-vascular endothelial growth factor antibody biopolymer that is in Phase IIb/III clinical study to treat wet age-related macular degeneration (AMD), as well as for the treatment of diabetic macular edema, naïve macular edema due to retinal vein occlusion, and non-proliferative diabetic retinopathy. The company's preclinical stage product candidate includes KSI-501, a bispecific conjugate to treat retinal diseases with an inflammatory component; and KSI-601, a triplet inhibitor for the treatment of dry AMD. The company was formerly known as Oligasis, LLC and changed its name to Kodiak Sciences Inc. in September 2015. Kodiak Sciences Inc. was incorporated in 2009 and is based in Palo Alto, California.
KOD (Kodiak Sciences Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $2.10B, a beta of 2.32 versus the broader market, a 52-week range of 2.81-47.84, average daily share volume of 1.1M, a public-listing history dating back to 2018, approximately 109 full-time employees. These structural characteristics shape how KOD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.32 indicates KOD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a straddle on KOD?
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 KOD snapshot
As of May 15, 2026, spot at $36.62, ATM IV 84.50%, IV rank 6.33%, expected move 24.23%. The straddle on KOD 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 KOD specifically: KOD IV at 84.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a KOD straddle, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $8.87 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 KOD expiries trade a higher absolute premium for lower per-day decay. Position sizing on KOD should anchor to the underlying notional of $36.62 per share and to the trader's directional view on KOD stock.
KOD straddle setup
The KOD 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 KOD near $36.62, the first option leg uses a $37.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KOD 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 KOD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $37.00 | $4.15 |
| Buy 1 | Put | $37.00 | $3.55 |
KOD straddle risk and reward
- Net Premium / Debit
- -$770.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$752.30
- Breakeven(s)
- $29.30, $44.70
- 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.
KOD straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on KOD. 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% | +$2,929.00 |
| $8.11 | -77.9% | +$2,119.42 |
| $16.20 | -55.8% | +$1,309.84 |
| $24.30 | -33.7% | +$500.27 |
| $32.39 | -11.5% | -$309.31 |
| $40.49 | +10.6% | -$421.11 |
| $48.58 | +32.7% | +$388.47 |
| $56.68 | +54.8% | +$1,198.05 |
| $64.78 | +76.9% | +$2,007.62 |
| $72.87 | +99.0% | +$2,817.20 |
When traders use straddle on KOD
Straddles on KOD are pure-volatility plays that profit from large moves in either direction; traders typically buy KOD straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
KOD thesis for this straddle
The market-implied 1-standard-deviation range for KOD extends from approximately $27.75 on the downside to $45.49 on the upside. A KOD 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 KOD IV rank near 6.33% 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 KOD at 84.50%. As a Healthcare name, KOD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KOD-specific events.
KOD 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. KOD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KOD alongside the broader basket even when KOD-specific fundamentals are unchanged. Always rebuild the position from current KOD chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on KOD?
- A straddle on KOD is the straddle strategy applied to KOD (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 KOD stock trading near $36.62, the strikes shown on this page are snapped to the nearest listed KOD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KOD 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 KOD straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 84.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$752.30 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KOD straddle?
- The breakeven for the KOD straddle priced on this page is roughly $29.30 and $44.70 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 KOD market-implied 1-standard-deviation expected move is approximately 24.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on KOD?
- Straddles on KOD are pure-volatility plays that profit from large moves in either direction; traders typically buy KOD 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 KOD implied volatility affect this straddle?
- KOD ATM IV is at 84.50% with IV rank near 6.33%, 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.