OLMA Strangle Strategy
OLMA (Olema Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Olema Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of therapies for women's cancers. Its lead product candidate is OP-1250, an estrogen receptor (ER) antagonist and a selective ER degrader, which is in Phase 1/2 clinical trial for the treatment of recurrent, locally advanced, or metastatic estrogen receptor-positive, human epidermal growth factor receptor 2-negative breast cancer. The company was formerly known as CombiThera, Inc. and changed its name to Olema Pharmaceuticals, Inc. in March 2009. Olema Pharmaceuticals, Inc. was incorporated in 2006 and is headquartered in San Francisco, California.
OLMA (Olema Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $1.18B, a beta of 2.06 versus the broader market, a 52-week range of 3.89-36.259, average daily share volume of 1.5M, a public-listing history dating back to 2020, approximately 96 full-time employees. These structural characteristics shape how OLMA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.06 indicates OLMA 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 strangle on OLMA?
A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money.
Current OLMA snapshot
As of May 15, 2026, spot at $13.57, ATM IV 97.80%, IV rank 9.85%, expected move 28.04%. The strangle on OLMA 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 strangle structure on OLMA specifically: OLMA IV at 97.80% is on the cheap side of its 1-year range, which favors premium-buying structures like a OLMA strangle, with a market-implied 1-standard-deviation move of approximately 28.04% (roughly $3.80 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 OLMA expiries trade a higher absolute premium for lower per-day decay. Position sizing on OLMA should anchor to the underlying notional of $13.57 per share and to the trader's directional view on OLMA stock.
OLMA strangle setup
The OLMA strangle below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With OLMA near $13.57, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OLMA 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 OLMA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $14.00 | $1.88 |
| Buy 1 | Put | $13.00 | $1.71 |
OLMA strangle risk and reward
- Net Premium / Debit
- -$359.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$359.00
- Breakeven(s)
- $9.41, $17.59
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit.
OLMA strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on OLMA. 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% | +$940.00 |
| $3.01 | -77.8% | +$640.07 |
| $6.01 | -55.7% | +$340.14 |
| $9.01 | -33.6% | +$40.21 |
| $12.01 | -11.5% | -$259.72 |
| $15.01 | +10.6% | -$258.35 |
| $18.01 | +32.7% | +$41.58 |
| $21.01 | +54.8% | +$341.51 |
| $24.00 | +76.9% | +$641.44 |
| $27.00 | +99.0% | +$941.37 |
When traders use strangle on OLMA
Strangles on OLMA are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the OLMA chain.
OLMA thesis for this strangle
The market-implied 1-standard-deviation range for OLMA extends from approximately $9.77 on the downside to $17.37 on the upside. A OLMA long strangle is the OTM cousin of the straddle: lower up-front cost but the underlying has to travel further past either OTM strike before the position turns profitable at expiration. Current OLMA IV rank near 9.85% 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 OLMA at 97.80%. As a Healthcare name, OLMA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OLMA-specific events.
OLMA strangle positions are structurally neutral / high-volatility (long premium, OTM); 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. OLMA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OLMA alongside the broader basket even when OLMA-specific fundamentals are unchanged. Always rebuild the position from current OLMA chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on OLMA?
- A strangle on OLMA is the strangle strategy applied to OLMA (stock). The strategy is structurally neutral / high-volatility (long premium, OTM): A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money. With OLMA stock trading near $13.57, the strikes shown on this page are snapped to the nearest listed OLMA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OLMA strangle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit. For the OLMA strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 97.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$359.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a OLMA strangle?
- The breakeven for the OLMA strangle priced on this page is roughly $9.41 and $17.59 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 OLMA market-implied 1-standard-deviation expected move is approximately 28.04%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on OLMA?
- Strangles on OLMA are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the OLMA chain.
- How does current OLMA implied volatility affect this strangle?
- OLMA ATM IV is at 97.80% with IV rank near 9.85%, 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.