RYTM Collar Strategy
RYTM (Rhythm Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Rhythm Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for the treatment of rare genetic diseases of obesity. The company's lead product candidate is IMCIVREE, a potent melanocortin-4 receptor for the treatment of pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1, leptin receptor (LEPR) deficiency obesity, and Bardet-Biedl and Alström syndrome. It is also developing setmelanotide, which is in Phase II clinical trials for treating POMC or LEPR heterozygous deficiency obesities, steroid receptor coactivator 1 deficiency obesity, SH2B1 deficiency obesity, MC4 receptor deficiency obesity, Smith-Magenis syndrome obesity, POMC epigenetic disorders, and other MC4R disorders. Rhythm Pharmaceuticals, Inc. has a collaborative research agreement with the Clinical Registry Investigating Bardet-Biedl Syndrome. The company was formerly known as Rhythm Metabolic, Inc. and changed its name to Rhythm Pharmaceuticals, Inc. in October 2015. Rhythm Pharmaceuticals, Inc. was founded in 2008 and is headquartered in Boston, Massachusetts.
RYTM (Rhythm Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $6.42B, a beta of 1.94 versus the broader market, a 52-week range of 57.2-122.2, average daily share volume of 873K, a public-listing history dating back to 2017, approximately 283 full-time employees. These structural characteristics shape how RYTM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.94 indicates RYTM 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 collar on RYTM?
A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot.
Current RYTM snapshot
As of May 15, 2026, spot at $90.66, ATM IV 81.90%, IV rank 37.64%, expected move 23.48%. The collar on RYTM 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 63-day expiry.
Why this collar structure on RYTM specifically: IV regime affects collar pricing on both sides; mid-range RYTM IV at 81.90% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 23.48% (roughly $21.29 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RYTM expiries trade a higher absolute premium for lower per-day decay. Position sizing on RYTM should anchor to the underlying notional of $90.66 per share and to the trader's directional view on RYTM stock.
RYTM collar setup
The RYTM collar below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With RYTM near $90.66, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RYTM chain at a 63-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 RYTM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $90.66 | long |
| Sell 1 | Call | $95.00 | $9.20 |
| Buy 1 | Put | $85.00 | $7.60 |
RYTM collar risk and reward
- Net Premium / Debit
- -$8,906.00
- Max Profit (per contract)
- $594.00
- Max Loss (per contract)
- -$406.00
- Breakeven(s)
- $89.06
- Risk / Reward Ratio
- 1.463
Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium.
RYTM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on RYTM. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$406.00 |
| $20.05 | -77.9% | -$406.00 |
| $40.10 | -55.8% | -$406.00 |
| $60.14 | -33.7% | -$406.00 |
| $80.19 | -11.6% | -$406.00 |
| $100.23 | +10.6% | +$594.00 |
| $120.28 | +32.7% | +$594.00 |
| $140.32 | +54.8% | +$594.00 |
| $160.36 | +76.9% | +$594.00 |
| $180.41 | +99.0% | +$594.00 |
When traders use collar on RYTM
Collars on RYTM hedge an existing long RYTM stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
RYTM thesis for this collar
The market-implied 1-standard-deviation range for RYTM extends from approximately $69.37 on the downside to $111.95 on the upside. A RYTM collar hedges an existing long RYTM position with a protective put while financing the put cost via a short call; when the premiums roughly offset, the collar acts as a near-zero-cost insurance band around the current spot. Current RYTM IV rank near 37.64% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on RYTM should anchor more to the directional view and the expected-move geometry. As a Healthcare name, RYTM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RYTM-specific events.
RYTM collar positions are structurally neutral (protective); 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. RYTM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RYTM alongside the broader basket even when RYTM-specific fundamentals are unchanged. Always rebuild the position from current RYTM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on RYTM?
- A collar on RYTM is the collar strategy applied to RYTM (stock). The strategy is structurally neutral (protective): A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot. With RYTM stock trading near $90.66, the strikes shown on this page are snapped to the nearest listed RYTM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RYTM collar max profit and max loss calculated?
- Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the RYTM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 81.90%), the computed maximum profit is $594.00 per contract and the computed maximum loss is -$406.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RYTM collar?
- The breakeven for the RYTM collar priced on this page is roughly $89.06 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 RYTM market-implied 1-standard-deviation expected move is approximately 23.48%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on RYTM?
- Collars on RYTM hedge an existing long RYTM stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
- How does current RYTM implied volatility affect this collar?
- RYTM ATM IV is at 81.90% with IV rank near 37.64%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.