LLY Bear Put Spread Strategy
LLY (Eli Lilly and Company), in the Healthcare sector, (Drug Manufacturers - General industry), listed on NYSE.
Eli Lilly and Company is a prominent global pharmaceutical firm dedicated to the research, development, and commercialization of human medicines across the world. Its therapeutic offerings include a comprehensive suite of diabetes medications. This encompasses various insulin formulations like Basaglar, the Humalog family (e.g., Mix 75/25, U-100, U-200, Mix 50/50), insulin lispro products (including protamine and mix 75/25), and the Humulin line (e.g., 70/30, N, R, U-500). Furthermore, Eli Lilly provides specialized treatments for type 2 diabetes, such as Jardiance, Trajenta, and Trulicity. In oncology, Eli Lilly offers a robust portfolio targeting various cancers. These include Alimta for non-small cell lung cancer (NSCLC) and malignant pleural mesothelioma; Cyramza, indicated for metastatic gastric cancer, gastro-esophageal junction adenocarcinoma, metastatic NSCLC, metastatic colorectal cancer, and hepatocellular carcinoma; Erbitux for colorectal and various head and neck cancers; Retevmo, used in metastatic NSCLC, medullary thyroid, and other thyroid cancers; Tyvyt for relapsed or refractory classic Hodgkin's lymphoma and non-squamous NSCLC; and Verzenio, prescribed for HR+, HER2- metastatic breast cancer, node-positive, and early breast cancer.
LLY (Eli Lilly and Company) trades in the Healthcare sector, specifically Drug Manufacturers - General, with a market capitalization of approximately $1.15T, a trailing P/E of 40.78, a beta of 0.51 versus the broader market, a 52-week range of 644.5-1249.45, average daily share volume of 3.1M, a public-listing history dating back to 1972, approximately 50K full-time employees. These structural characteristics shape how LLY stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.51 indicates LLY has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 40.78 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. LLY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on LLY?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
LLY snapshot
As of August 14, 2026, spot at $1,178.20, ATM IV 28.57%, IV rank 13.44%, expected move 8.19%. The bear put spread on LLY 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 bear put spread structure on LLY specifically: LLY IV at 28.57% is on the cheap side of its 1-year range, which favors premium-buying structures like a LLY bear put spread, with a market-implied 1-standard-deviation move of approximately 8.19% (roughly $96.50 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 LLY expiries trade a higher absolute premium for lower per-day decay. Position sizing on LLY should anchor to the underlying notional of $1,178.20 per share and to the trader's directional view on LLY stock.
LLY bear put spread setup
The LLY bear put spread 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 LLY at $1,178.20 on that close, the first option leg uses a $1,180.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LLY 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 LLY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $1,180.00 | $37.03 |
| Sell 1 | Put | $1,120.00 | $13.78 |
LLY bear put spread risk and reward
- Net Premium / Debit
- -$2,325.00
- Max Profit (per contract)
- $3,675.00
- Max Loss (per contract)
- -$2,325.00
- Breakeven(s)
- $1,156.75
- Risk / Reward Ratio
- 1.581
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
LLY bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on LLY. 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% | +$3,675.00 |
| $260.52 | -77.9% | +$3,675.00 |
| $521.02 | -55.8% | +$3,675.00 |
| $781.53 | -33.7% | +$3,675.00 |
| $1,042.03 | -11.6% | +$3,675.00 |
| $1,302.54 | +10.6% | -$2,325.00 |
| $1,563.04 | +32.7% | -$2,325.00 |
| $1,823.55 | +54.8% | -$2,325.00 |
| $2,084.05 | +76.9% | -$2,325.00 |
| $2,344.56 | +99.0% | -$2,325.00 |
When traders use bear put spread on LLY
Bear put spreads on LLY reduce the cost of a bearish LLY stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
LLY thesis for this bear put spread
The market-implied 1-standard-deviation range for LLY extends from approximately $1,081.70 on the downside to $1,274.70 on the upside. A LLY bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on LLY, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current LLY IV rank near 13.44% 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 LLY at 28.57%. As a Healthcare name, LLY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LLY-specific events.
LLY bear put spread positions are structurally moderately bearish; 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. LLY positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LLY alongside the broader basket even when LLY-specific fundamentals are unchanged. Long-premium structures like a bear put spread on LLY are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current LLY chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on LLY?
- A bear put spread on LLY is the bear put spread strategy applied to LLY (stock). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With LLY stock at $1,178.20 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LLY chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are LLY bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the LLY bear put spread priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 28.57%), the computed maximum profit is $3,675.00 per contract and the computed maximum loss is -$2,325.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LLY bear put spread?
- The breakeven for the LLY bear put spread priced on this page is roughly $1,156.75 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 LLY market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.19%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on LLY?
- Bear put spreads on LLY reduce the cost of a bearish LLY stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current LLY implied volatility affect this bear put spread?
- LLY ATM IV is at 28.57% with IV rank near 13.44%, 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.