LXRX Straddle Strategy

LXRX (Lexicon Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain. The company has strategic collaboration and license agreements with Bristol-Myers Squibb Company, and Genentech, Inc. Lexicon Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in The Woodlands, Texas.

LXRX (Lexicon Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $1.08B, a beta of 0.97 versus the broader market, a 52-week range of 0.51-2.53, average daily share volume of 2.6M, a public-listing history dating back to 2000, approximately 103 full-time employees. These structural characteristics shape how LXRX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.97 places LXRX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a straddle on LXRX?

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 LXRX snapshot

As of May 15, 2026, spot at $2.25, ATM IV 99.70%, IV rank 18.95%, expected move 28.58%. The straddle on LXRX 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 LXRX specifically: LXRX IV at 99.70% is on the cheap side of its 1-year range, which favors premium-buying structures like a LXRX straddle, with a market-implied 1-standard-deviation move of approximately 28.58% (roughly $0.64 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 LXRX expiries trade a higher absolute premium for lower per-day decay. Position sizing on LXRX should anchor to the underlying notional of $2.25 per share and to the trader's directional view on LXRX stock.

LXRX straddle setup

The LXRX 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 LXRX near $2.25, the first option leg uses a $2.25 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LXRX 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 LXRX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$2.25	N/A
Buy 1	Put	$2.25	N/A

LXRX 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.

LXRX straddle payoff curve

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

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

LXRX thesis for this straddle

The market-implied 1-standard-deviation range for LXRX extends from approximately $1.61 on the downside to $2.89 on the upside. A LXRX 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 LXRX IV rank near 18.95% 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 LXRX at 99.70%. As a Healthcare name, LXRX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LXRX-specific events.

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

Frequently asked questions

What is a straddle on LXRX?: A straddle on LXRX is the straddle strategy applied to LXRX (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 LXRX stock trading near $2.25, the strikes shown on this page are snapped to the nearest listed LXRX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are LXRX 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 LXRX straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 99.70%), 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 LXRX straddle?: The breakeven for the LXRX 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 LXRX market-implied 1-standard-deviation expected move is approximately 28.58%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a straddle on LXRX?: Straddles on LXRX are pure-volatility plays that profit from large moves in either direction; traders typically buy LXRX 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 LXRX implied volatility affect this straddle?: LXRX ATM IV is at 99.70% with IV rank near 18.95%, 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.