PRME Bear Put Spread Strategy
PRME (Prime Medicine, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Prime Medicine, Inc., a biotechnology company, delivers genetic therapies to address diseases by deploying gene editing technology. It offers Prime Editors with a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme; and a pegRNA, which targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. The company was incorporated in 2019 and is headquartered in Cambridge, Massachusetts.
PRME (Prime Medicine, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $590.6M, a beta of 2.36 versus the broader market, a 52-week range of 1.11-6.94, average daily share volume of 2.4M, a public-listing history dating back to 2022, approximately 214 full-time employees. These structural characteristics shape how PRME stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.36 indicates PRME 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 bear put spread on PRME?
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.
Current PRME snapshot
As of May 14, 2026, spot at $3.13, ATM IV 102.40%, IV rank 21.97%, expected move 29.36%. The bear put spread on PRME 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 35-day expiry.
Why this bear put spread structure on PRME specifically: PRME IV at 102.40% is on the cheap side of its 1-year range, which favors premium-buying structures like a PRME bear put spread, with a market-implied 1-standard-deviation move of approximately 29.36% (roughly $0.92 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 PRME expiries trade a higher absolute premium for lower per-day decay. Position sizing on PRME should anchor to the underlying notional of $3.13 per share and to the trader's directional view on PRME stock.
PRME bear put spread setup
The PRME bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With PRME near $3.13, the first option leg uses a $3.13 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PRME 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 PRME shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $3.13 | N/A |
| Sell 1 | Put | $2.97 | N/A |
PRME bear put spread 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 strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
PRME bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on PRME. 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 bear put spread on PRME
Bear put spreads on PRME reduce the cost of a bearish PRME stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
PRME thesis for this bear put spread
The market-implied 1-standard-deviation range for PRME extends from approximately $2.21 on the downside to $4.05 on the upside. A PRME bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on PRME, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current PRME IV rank near 21.97% 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 PRME at 102.40%. As a Healthcare name, PRME options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PRME-specific events.
PRME 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. PRME positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PRME alongside the broader basket even when PRME-specific fundamentals are unchanged. Long-premium structures like a bear put spread on PRME 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 PRME chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on PRME?
- A bear put spread on PRME is the bear put spread strategy applied to PRME (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 PRME stock trading near $3.13, the strikes shown on this page are snapped to the nearest listed PRME chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PRME 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 PRME bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 102.40%), 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 PRME bear put spread?
- The breakeven for the PRME bear put spread 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 PRME market-implied 1-standard-deviation expected move is approximately 29.36%; 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 PRME?
- Bear put spreads on PRME reduce the cost of a bearish PRME 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 PRME implied volatility affect this bear put spread?
- PRME ATM IV is at 102.40% with IV rank near 21.97%, 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.