PRME Cash-Secured Put 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 cash-secured put on PRME?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
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 cash-secured put 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 cash-secured put structure on PRME specifically: PRME IV at 102.40% is on the cheap side of its 1-year range, which means a premium-selling PRME cash-secured put collects less credit per unit of strike-width risk, 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 cash-secured put setup
The PRME cash-secured put 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 $2.97 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) |
|---|---|---|---|
| Sell 1 | Put | $2.97 | N/A |
PRME cash-secured put 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 premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
PRME cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put 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 cash-secured put on PRME
Cash-secured puts on PRME earn premium while a trader waits to acquire PRME stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning PRME.
PRME thesis for this cash-secured put
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 cash-secured put lets a trader earn premium while waiting to acquire PRME at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. 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 cash-secured put positions are structurally neutral to slightly bullish; 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. Short-premium structures like a cash-secured put on PRME carry tail risk when realized volatility exceeds the implied move; review historical PRME earnings reactions and macro stress periods before sizing. Always rebuild the position from current PRME chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on PRME?
- A cash-secured put on PRME is the cash-secured put strategy applied to PRME (stock). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. 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 cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the PRME cash-secured put 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 cash-secured put?
- The breakeven for the PRME cash-secured put 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 cash-secured put on PRME?
- Cash-secured puts on PRME earn premium while a trader waits to acquire PRME stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning PRME.
- How does current PRME implied volatility affect this cash-secured put?
- 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.