PRME Straddle Strategy
PRME (Prime Medicine, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Prime Medicine, Inc. operates as a biotechnology firm, dedicated to delivering genetic therapies for various diseases by strategically employing advanced gene editing technology. Central to their platform is the "Prime Editor" system, which combines a unique Prime Editor protein—a hybrid composed of a Cas protein and a reverse transcriptase enzyme—with a specialized pegRNA molecule. This pegRNA plays a crucial role by both guiding the Prime Editor to a precise location within the genome and providing the essential template for introducing the desired modification to the target DNA sequence. The company, founded in 2019, maintains its headquarters in Cambridge, Massachusetts.
PRME (Prime Medicine, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $578.0M, a beta of 2.31 versus the broader market, a 52-week range of 2.67-6.94, average daily share volume of 2.9M, a public-listing history dating back to 2022, approximately 146 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 2.31 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. PRME pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a straddle on PRME?
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.
PRME snapshot
As of August 14, 2026, spot at $3.10, ATM IV 101.90%, IV rank 27.61%, expected move 29.21%. The straddle on PRME 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 PRME specifically: PRME IV at 101.90% is on the cheap side of its 1-year range, which favors premium-buying structures like a PRME straddle, with a market-implied 1-standard-deviation move of approximately 29.21% (roughly $0.91 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 $3.10 per share and to the trader's directional view on PRME stock.
PRME straddle setup
The PRME 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 PRME at $3.10 on that close, the first option leg uses a $3.10 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 | Call | $3.10 | N/A |
| Buy 1 | Put | $3.10 | N/A |
PRME 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.
PRME straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle 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 straddle on PRME
Straddles on PRME are pure-volatility plays that profit from large moves in either direction; traders typically buy PRME straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
PRME thesis for this straddle
The market-implied 1-standard-deviation range for PRME extends from approximately $2.19 on the downside to $4.01 on the upside. A PRME 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 PRME IV rank near 27.61% 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 101.90%. 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 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. 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. Always rebuild the position from current PRME chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on PRME?
- A straddle on PRME is the straddle strategy applied to PRME (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 PRME stock at $3.10 on the most recent close, the strikes shown on this page are snapped to the nearest listed PRME chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PRME 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 PRME straddle priced from the end-of-day chain at a 30-day expiry (ATM IV 101.90%), 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 straddle?
- The breakeven for the PRME 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 PRME market-implied 1-standard-deviation expected move in the same options snapshot is approximately 29.21%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on PRME?
- Straddles on PRME are pure-volatility plays that profit from large moves in either direction; traders typically buy PRME 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 PRME implied volatility affect this straddle?
- PRME ATM IV is at 101.90% with IV rank near 27.61%, 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.