SMMT Straddle Strategy
SMMT (Summit Therapeutics Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Summit Therapeutics Inc. is a biopharmaceutical firm dedicated to discovering, developing, and commercializing therapeutic solutions, primarily targeting infectious diseases across the United States and Latin America. The company's clinical development pipeline is heavily concentrated on therapies for Clostridioides difficile infection (CDI). Its flagship product candidate, ridinilazole, is an orally administered small molecule antibiotic currently advancing through Phase III clinical trials as a treatment for CDI. Beyond its lead asset, Summit Therapeutics is also progressing SMT-738, designed to combat multidrug-resistant infections, notably carbapenem-resistant Enterobacteriaceae (CRE). Additionally, its DDS-04 series represents a potential therapeutic avenue for various infections caused by the Enterobacteriaceae family of bacteria. Established in 2003, the company maintains its headquarters in Cambridge, Massachusetts.
SMMT (Summit Therapeutics Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $12.05B, a beta of -1.24 versus the broader market, a 52-week range of 12.25-30.05, average daily share volume of 4.8M, a public-listing history dating back to 2015, approximately 265 full-time employees. These structural characteristics shape how SMMT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -1.24 indicates SMMT 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 straddle on SMMT?
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.
SMMT snapshot
As of August 14, 2026, spot at $13.63, ATM IV 83.35%, IV rank 25.07%, expected move 23.90%. The straddle on SMMT below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this straddle structure on SMMT specifically: SMMT IV at 83.35% is on the cheap side of its 1-year range, which favors premium-buying structures like a SMMT straddle, with a market-implied 1-standard-deviation move of approximately 23.90% (roughly $3.26 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SMMT expiries trade a higher absolute premium for lower per-day decay. Position sizing on SMMT should anchor to the underlying notional of $13.63 per share and to the trader's directional view on SMMT stock.
SMMT straddle setup
The SMMT straddle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With SMMT at $13.63 on that close, the first option leg uses a $13.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SMMT chain at a 28-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 SMMT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $13.50 | $1.35 |
| Buy 1 | Put | $13.50 | $2.10 |
SMMT straddle risk and reward
- Net Premium / Debit
- -$345.00
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$338.35
- Breakeven(s)
- $10.05, $16.95
- Risk / Reward Ratio
- Unbounded
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.
SMMT straddle payoff curve
Modeled P&L at expiration across a range of underlying prices for the straddle on SMMT. 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 | -99.9% | +$1,004.00 |
| $3.02 | -77.8% | +$702.74 |
| $6.04 | -55.7% | +$401.49 |
| $9.05 | -33.6% | +$100.23 |
| $12.06 | -11.5% | -$201.03 |
| $15.07 | +10.6% | -$187.72 |
| $18.09 | +32.7% | +$113.54 |
| $21.10 | +54.8% | +$414.79 |
| $24.11 | +76.9% | +$716.05 |
| $27.12 | +99.0% | +$1,017.31 |
When traders use straddle on SMMT
Straddles on SMMT are pure-volatility plays that profit from large moves in either direction; traders typically buy SMMT straddles ahead of earnings, FDA decisions, or other catalysts where the realized move is expected to exceed the implied move priced into the chain.
SMMT thesis for this straddle
The market-implied 1-standard-deviation range for SMMT extends from approximately $10.37 on the downside to $16.89 on the upside. A SMMT 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 SMMT IV rank near 25.07% 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 SMMT at 83.35%. As a Healthcare name, SMMT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SMMT-specific events.
SMMT 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. SMMT positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SMMT alongside the broader basket even when SMMT-specific fundamentals are unchanged. Always rebuild the position from current SMMT chain quotes before placing a trade.
Frequently asked questions
- What is a straddle on SMMT?
- A straddle on SMMT is the straddle strategy applied to SMMT (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 SMMT stock at $13.63 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed SMMT chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are SMMT 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 SMMT straddle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 83.35%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$338.35 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SMMT straddle?
- The breakeven for the SMMT straddle priced on this page is roughly $10.05 and $16.95 at expiration, derived from the August 14, 2026 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 SMMT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 23.90%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a straddle on SMMT?
- Straddles on SMMT are pure-volatility plays that profit from large moves in either direction; traders typically buy SMMT 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 SMMT implied volatility affect this straddle?
- SMMT ATM IV is at 83.35% with IV rank near 25.07%, 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.