PRM Straddle Strategy
PRM (Perimeter Solutions, Inc.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NYSE.
Perimeter Solutions, Inc. is a global manufacturer and supplier specializing in fire suppression products and chemical additives for lubricants. Its operations are organized into two main divisions: Fire Safety and Oil Additives. The Fire Safety division provides a wide array of fire retardants, specialized firefighting foams, and related equipment and services. Its diverse customer base includes federal, state, provincial, and municipal government agencies, alongside commercial clients. The Oil Additives segment is dedicated to the production of Phosphorus Pentasulfide, a key component primarily used in the development of various lubricant additives, most notably the Zinc Dialkyldithiophosphates family. The company's offerings are marketed under prominent brand names such as PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG, and BIOGEMA.
PRM (Perimeter Solutions, Inc.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $5.64B, a beta of 1.91 versus the broader market, a 52-week range of 18.04-38.17, average daily share volume of 1.6M, a public-listing history dating back to 2021, approximately 356 full-time employees. These structural characteristics shape how PRM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.91 indicates PRM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. PRM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on PRM?
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.
PRM snapshot
As of August 14, 2026, spot at $33.80, ATM IV 54.10%, IV rank 10.89%, expected move 15.51%. The straddle on PRM below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this straddle structure on PRM specifically: PRM IV at 54.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a PRM straddle, with a market-implied 1-standard-deviation move of approximately 15.51% (roughly $5.24 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PRM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PRM should anchor to the underlying notional of $33.80 per share and to the trader's directional view on PRM stock.
PRM straddle setup
The PRM 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 PRM at $33.80 on that close, the first option leg uses a $33.80 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PRM chain at a 35-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 PRM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $33.80 | N/A |
| Buy 1 | Put | $33.80 | N/A |
PRM 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.
PRM straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on PRM. 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 PRM
Straddles on PRM are pure-volatility plays that profit from large moves in either direction; traders typically buy PRM straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
PRM thesis for this straddle
The market-implied 1-standard-deviation range for PRM extends from approximately $28.56 on the downside to $39.04 on the upside. A PRM 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 PRM IV rank near 10.89% 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 PRM at 54.10%. As a Basic Materials name, PRM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PRM-specific events.
PRM 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. PRM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PRM alongside the broader basket even when PRM-specific fundamentals are unchanged. Always rebuild the position from current PRM chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on PRM?
- A straddle on PRM is the straddle strategy applied to PRM (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 PRM stock at $33.80 on the most recent close, the strikes shown on this page are snapped to the nearest listed PRM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PRM 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 PRM straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 54.10%), 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 PRM straddle?
- The breakeven for the PRM straddle priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 PRM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 15.51%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on PRM?
- Straddles on PRM are pure-volatility plays that profit from large moves in either direction; traders typically buy PRM 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 PRM implied volatility affect this straddle?
- PRM ATM IV is at 54.10% with IV rank near 10.89%, 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.