TEM Cash-Secured Put Strategy
TEM (Tempus AI, Inc.), in the Healthcare sector, (Medical - Healthcare Information Services industry), listed on NASDAQ.
Tempus AI, Inc. operates as a healthcare technology company. It engages in providing next generation sequencing diagnostics, polymerase chain reaction profiling, molecular genotyping, and other anatomic and molecular pathology testing to healthcare providers, pharmaceutical companies, biotechnology companies, researchers, and other third parties. The company offers Insights, a license library of linked clinical, molecular, and imaging de-identified data, as well as a suite of analytical services to analytic and cloud-and-compute tools to pharmaceutical and biotechnology companies; and Trials that provides clinical trial matching services to pharmaceutical companies. In addition, it operates Next; Algos, a suite of algorithmic tests in oncology; Hub, a desktop and mobile platform for ordering, managing, and receiving tests and patient results; and Lens, a platform for researchers and scientists to find, access, and analyze Tempus data. The company has a strategic collaborations agreement with AstraZeneca and Pathos AI, Inc. to develop therapeutic programs in oncology. The company was formerly known as Tempus Labs, Inc. and changed its name to Tempus AI, Inc. in January 2023.
TEM (Tempus AI, Inc.) trades in the Healthcare sector, specifically Medical - Healthcare Information Services, with a market capitalization of approximately $8.01B, a beta of 3.99 versus the broader market, a 52-week range of 41.73-104.32, average daily share volume of 5.7M, a public-listing history dating back to 2024, approximately 2K full-time employees. These structural characteristics shape how TEM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.99 indicates TEM 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 cash-secured put on TEM?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
Current TEM snapshot
As of May 15, 2026, spot at $44.27, ATM IV 66.30%, IV rank 15.23%, expected move 19.01%. The cash-secured put on TEM 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 28-day expiry.
Why this cash-secured put structure on TEM specifically: TEM IV at 66.30% is on the cheap side of its 1-year range, which means a premium-selling TEM cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 19.01% (roughly $8.41 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 TEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on TEM should anchor to the underlying notional of $44.27 per share and to the trader's directional view on TEM stock.
TEM cash-secured put setup
The TEM cash-secured put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TEM near $44.27, the first option leg uses a $42.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TEM 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 TEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $42.00 | $2.13 |
TEM cash-secured put risk and reward
- Net Premium / Debit
- +$212.50
- Max Profit (per contract)
- $212.50
- Max Loss (per contract)
- -$3,986.50
- Breakeven(s)
- $39.88
- Risk / Reward Ratio
- 0.053
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
TEM cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on TEM. 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% | -$3,986.50 |
| $9.80 | -77.9% | -$3,007.78 |
| $19.58 | -55.8% | -$2,029.05 |
| $29.37 | -33.7% | -$1,050.33 |
| $39.16 | -11.5% | -$71.61 |
| $48.95 | +10.6% | +$212.50 |
| $58.73 | +32.7% | +$212.50 |
| $68.52 | +54.8% | +$212.50 |
| $78.31 | +76.9% | +$212.50 |
| $88.10 | +99.0% | +$212.50 |
When traders use cash-secured put on TEM
Cash-secured puts on TEM earn premium while a trader waits to acquire TEM stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning TEM.
TEM thesis for this cash-secured put
The market-implied 1-standard-deviation range for TEM extends from approximately $35.86 on the downside to $52.68 on the upside. A TEM cash-secured put lets a trader earn premium while waiting to acquire TEM at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current TEM IV rank near 15.23% 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 TEM at 66.30%. As a Healthcare name, TEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TEM-specific events.
TEM cash-secured put positions are structurally neutral to slightly bullish; 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. TEM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TEM alongside the broader basket even when TEM-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on TEM carry tail risk when realized volatility exceeds the implied move; review historical TEM earnings reactions and macro stress periods before sizing. Always rebuild the position from current TEM chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on TEM?
- A cash-secured put on TEM is the cash-secured put strategy applied to TEM (stock). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. With TEM stock trading near $44.27, the strikes shown on this page are snapped to the nearest listed TEM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TEM cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the TEM cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 66.30%), the computed maximum profit is $212.50 per contract and the computed maximum loss is -$3,986.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TEM cash-secured put?
- The breakeven for the TEM cash-secured put priced on this page is roughly $39.88 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 TEM market-implied 1-standard-deviation expected move is approximately 19.01%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a cash-secured put on TEM?
- Cash-secured puts on TEM earn premium while a trader waits to acquire TEM stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning TEM.
- How does current TEM implied volatility affect this cash-secured put?
- TEM ATM IV is at 66.30% with IV rank near 15.23%, 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.