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 53.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$750.00 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 $25.00 and $42.50 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 15.45%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RARE implied volatility affect this strangle?

RARE ATM IV is at 53.90% with IV rank near 9.72%, 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.

RARE Strangle Strategy

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

Ultragenyx Pharmaceutical Inc. is a biopharmaceutical firm dedicated to discovering, developing, and commercializing innovative treatments for rare and ultra-rare genetic conditions. Its operations span North America, Europe, and other international markets. The company's portfolio of marketed biologic products addresses several serious diseases. This includes Crysvita (burosumab), an antibody that targets fibroblast growth factor 23, used to treat X-linked hypophosphatemia and tumor-induced osteomalacia. Mepsevii offers enzyme replacement therapy for both pediatric and adult patients suffering from Mucopolysaccharidosis VII. Dojolvi is available for individuals with long-chain fatty acid oxidation disorders, while Evkeeza (evinacumab) provides a treatment option for homozygous familial hypercholesterolemia.

RARE (Ultragenyx Pharmaceutical Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $3.03B, a beta of 0.38 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 0.38 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 June 30, 2026, spot at $33.58, ATM IV 53.90%, IV rank 9.72%, expected move 15.45%. 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 52-day expiry.

Why this strangle structure on RARE specifically: RARE IV at 53.90% 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 15.45% (roughly $5.19 on the underlying). The 52-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 $33.58 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 $33.58, the first option leg uses a $35.00 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 52-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).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$35.00	$3.75
Buy 1	Put	$32.50	$3.75

RARE strangle risk and reward

Net Premium / Debit: -$750.00
Max Profit (per contract): Unbounded
Max Loss (per contract): -$750.00
Breakeven(s): $25.00, $42.50
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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	+$2,499.00
$7.43	-77.9%	+$1,756.64
$14.86	-55.8%	+$1,014.28
$22.28	-33.6%	+$271.91
$29.70	-11.5%	-$470.45
$37.13	+10.6%	-$537.19
$44.55	+32.7%	+$205.17
$51.98	+54.8%	+$947.53
$59.40	+76.9%	+$1,689.89
$66.82	+99.0%	+$2,432.26

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 $28.39 on the downside to $38.77 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 9.72% 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 53.90%. 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 $33.58, 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 53.90%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$750.00 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 $25.00 and $42.50 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 15.45%; 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 53.90% with IV rank near 9.72%, 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.