LRMR Butterfly Strategy
LRMR (Larimar Therapeutics, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Larimar Therapeutics, Inc., a clinical-stage biotechnology company, focuses on developing treatments for rare diseases using its novel cell penetrating peptide technology platform. Its lead product candidate is CTI-1601, which is in Phase 1 clinical trial for the treatment of Friedreich's ataxia, a rare, progressive, and fatal genetic disease. The company is based in Bala Cynwyd, Pennsylvania.
LRMR (Larimar Therapeutics, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $350.9M, a beta of 0.91 versus the broader market, a 52-week range of 1.73-6.42, average daily share volume of 4.4M, a public-listing history dating back to 2014, approximately 65 full-time employees. These structural characteristics shape how LRMR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.91 places LRMR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a butterfly on LRMR?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
Current LRMR snapshot
As of May 15, 2026, spot at $3.62, ATM IV 23.10%, IV rank 0.51%, expected move 6.62%. The butterfly on LRMR 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 butterfly structure on LRMR specifically: LRMR IV at 23.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a LRMR butterfly, with a market-implied 1-standard-deviation move of approximately 6.62% (roughly $0.24 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 LRMR expiries trade a higher absolute premium for lower per-day decay. Position sizing on LRMR should anchor to the underlying notional of $3.62 per share and to the trader's directional view on LRMR stock.
LRMR butterfly setup
The LRMR butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With LRMR near $3.62, the first option leg uses a $3.44 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LRMR 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 LRMR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $3.44 | N/A |
| Sell 2 | Call | $3.62 | N/A |
| Buy 1 | Call | $3.80 | N/A |
LRMR butterfly 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
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
LRMR butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on LRMR. 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 butterfly on LRMR
Butterflies on LRMR are pinning bets - traders use them when they expect LRMR to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
LRMR thesis for this butterfly
The market-implied 1-standard-deviation range for LRMR extends from approximately $3.38 on the downside to $3.86 on the upside. A LRMR long call butterfly is a pinning play: it pays maximum at the middle strike if LRMR settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current LRMR IV rank near 0.51% 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 LRMR at 23.10%. As a Healthcare name, LRMR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LRMR-specific events.
LRMR butterfly positions are structurally neutral / pin (limited-risk, limited-reward); 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. LRMR positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LRMR alongside the broader basket even when LRMR-specific fundamentals are unchanged. Always rebuild the position from current LRMR chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on LRMR?
- A butterfly on LRMR is the butterfly strategy applied to LRMR (stock). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With LRMR stock trading near $3.62, the strikes shown on this page are snapped to the nearest listed LRMR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LRMR butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the LRMR butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 23.10%), 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 LRMR butterfly?
- The breakeven for the LRMR butterfly 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 LRMR market-implied 1-standard-deviation expected move is approximately 6.62%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on LRMR?
- Butterflies on LRMR are pinning bets - traders use them when they expect LRMR to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current LRMR implied volatility affect this butterfly?
- LRMR ATM IV is at 23.10% with IV rank near 0.51%, 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.