RARE Strangle Strategy

RARE (Ultragenyx Pharmaceutical Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Ultragenyx Pharmaceutical Inc., a biopharmaceutical company, focuses on the identification, acquisition, development, and commercialization of novel products for the treatment of rare and ultra-rare genetic diseases in North America, Europe, and internationally. Its biologic products include Crysvita (burosumab), an antibody targeting fibroblast growth factor 23 for the treatment of X-linked hypophosphatemia, as well as tumor-induced osteomalacia; Mepsevii, an enzyme replacement therapy for the treatment of children and adults with Mucopolysaccharidosis VII; Dojolvi for treating long-chain fatty acid oxidation disorders; and Evkeeza (evinacumab) for the treatment of homozygous familial hypercholesterolemia. The company's products candidatures include DTX401, an adeno-associated virus 8 (AAV8) gene therapy clinical candidate for the treatment of patients with glycogen storage disease type Ia; DTX301, an AAV8 gene therapy for the treatment of patients with ornithine transcarbamylase; UX143, a human monoclonal antibody for the treatment of osteogenesis imperfecta; GTX-102, an antisense oligonucleotide for the treatment of Angelman syndrome; UX701, for the treatment of Wilson disease; and UX053 for the treatment of glycogen storage disease type III. Ultragenyx Pharmaceutical Inc. has collaboration and license agreement with Kyowa Kirin Co., Ltd.; Saint Louis University; Baylor Research Institute; REGENXBIO Inc.; Bayer Healthcare LLC; GeneTx; Mereo; University of Pennsylvania; Arcturus Therapeutics Holdings Inc., Solid Biosciences Inc.; and Daiichi Sankyo Co., Ltd. Ultragenyx Pharmaceutical Inc. was incorporated in 2010 and is headquartered in Novato, California.

RARE (Ultragenyx Pharmaceutical Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $2.61B, a beta of 0.39 versus the broader market, a 52-week range of 18.29-42.37, average daily share volume of 2.0M, a public-listing history dating back to 2014, approximately 1K full-time employees. These structural characteristics shape how RARE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.39 indicates RARE has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a strangle on RARE?

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 RARE snapshot

As of May 15, 2026, spot at $25.07, ATM IV 45.30%, IV rank 13.83%, expected move 12.99%. The strangle on RARE 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 98-day expiry.

Why this strangle structure on RARE specifically: RARE IV at 45.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a RARE strangle, with a market-implied 1-standard-deviation move of approximately 12.99% (roughly $3.26 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RARE expiries trade a higher absolute premium for lower per-day decay. Position sizing on RARE should anchor to the underlying notional of $25.07 per share and to the trader's directional view on RARE stock.

RARE strangle setup

The RARE 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 RARE near $25.07, the first option leg uses a $27.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RARE chain at a 98-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 RARE shares for the stock leg in covered calls and collars).

RARE strangle risk and reward

Net Premium / Debit

-$912.50

Max Profit (per contract)

Unbounded

Max Loss (per contract)

-$912.50

Breakeven(s)

$15.88, $36.63

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.

RARE strangle payoff curve

Modeled P&L at expiration across a range of underlying prices for the strangle on RARE. 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 strangle on RARE

Strangles on RARE 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 RARE chain.

RARE thesis for this strangle

The market-implied 1-standard-deviation range for RARE extends from approximately $21.81 on the downside to $28.33 on the upside. A RARE 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 RARE IV rank near 13.83% 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 RARE at 45.30%. As a Healthcare name, RARE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RARE-specific events.

RARE 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. RARE positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RARE alongside the broader basket even when RARE-specific fundamentals are unchanged. Always rebuild the position from current RARE chain quotes before placing a trade.

Frequently asked questions

What is a strangle on RARE?

A strangle on RARE is the strangle strategy applied to RARE (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 RARE stock trading near $25.07, the strikes shown on this page are snapped to the nearest listed RARE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.

How are RARE 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 RARE strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 45.30%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$912.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RARE strangle?

The breakeven for the RARE strangle priced on this page is roughly $15.88 and $36.63 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 RARE market-implied 1-standard-deviation expected move is approximately 12.99%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

When should you consider a strangle on RARE?

Strangles on RARE 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 RARE chain.

How does current RARE implied volatility affect this strangle?

RARE ATM IV is at 45.30% with IV rank near 13.83%, 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.

Related RARE analysis

• Strangle strategy reference
• RARE options overview
• RARE P&L curve (full chain)
• RARE options chain
• RARE volatility skew