TERN Iron Condor Strategy
TERN (Terns Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Terns Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops small-molecule single-agent and combination therapy candidates for the treatment of non-alcoholic steatohepatitis (NASH) and obesity. The company develops TERN-101, a liver-distributed and non-bile acid farnesoid X receptor agonist, which is in Phase IIa clinical trial for the treatment of NASH; and TERN-201, a vascular adhesion protein-1 inhibitor that is in Phase Ib clinical trial for the treatment of NASH. It also develops TERN-501, a thyroid hormone receptor beta agonist with enhanced liver distribution and metabolic stability that is in Phase I clinical trial for the treatment of NASH; and TERN-601, a small-molecule Glucagon-Like Peptide-1 receptor agonist program that is intended to orally be administered for NASH and metabolic diseases, such as obesity. The company was incorporated in 2016 and is headquartered in Foster City, California.
TERN (Terns Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $4.77B, a beta of -0.38 versus the broader market, a 52-week range of 2.655-53.19, average daily share volume of 5.8M, a public-listing history dating back to 2021, approximately 59 full-time employees. These structural characteristics shape how TERN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.38 indicates TERN 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 iron condor on TERN?
An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes.
Current TERN snapshot
As of May 15, 2026, spot at $54.63, ATM IV 10.30%, IV rank 1.76%, expected move 2.95%. The iron condor on TERN 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 34-day expiry.
Why this iron condor structure on TERN specifically: TERN IV at 10.30% is on the cheap side of its 1-year range, which means a premium-selling TERN iron condor collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 2.95% (roughly $1.61 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TERN expiries trade a higher absolute premium for lower per-day decay. Position sizing on TERN should anchor to the underlying notional of $54.63 per share and to the trader's directional view on TERN stock.
TERN iron condor setup
The TERN iron condor below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TERN near $54.63, the first option leg uses a $57.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TERN chain at a 34-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 TERN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Call | $57.50 | $0.13 |
| Buy 1 | Call | $60.00 | $0.09 |
| Sell 1 | Put | $52.50 | $0.14 |
| Buy 1 | Put | $49.00 | $0.06 |
TERN iron condor risk and reward
- Net Premium / Debit
- +$12.00
- Max Profit (per contract)
- $12.00
- Max Loss (per contract)
- -$338.00
- Breakeven(s)
- $52.52, $57.53
- Risk / Reward Ratio
- 0.036
Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit.
TERN iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor on TERN. 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% | -$338.00 |
| $12.09 | -77.9% | -$338.00 |
| $24.17 | -55.8% | -$338.00 |
| $36.24 | -33.7% | -$338.00 |
| $48.32 | -11.5% | -$338.00 |
| $60.40 | +10.6% | -$238.00 |
| $72.48 | +32.7% | -$238.00 |
| $84.56 | +54.8% | -$238.00 |
| $96.63 | +76.9% | -$238.00 |
| $108.71 | +99.0% | -$238.00 |
When traders use iron condor on TERN
Iron condors on TERN are a delta-neutral premium-collection structure that profits if TERN stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
TERN thesis for this iron condor
The market-implied 1-standard-deviation range for TERN extends from approximately $53.02 on the downside to $56.24 on the upside. A TERN iron condor is a delta-neutral premium-collection structure that pays off when TERN stays inside the inner short strikes through expiration; the wing width should reflect the trader's tolerance for the maximum loss scenario where the underlying breaches an outer strike. Current TERN IV rank near 1.76% 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 TERN at 10.30%. As a Healthcare name, TERN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TERN-specific events.
TERN iron condor positions are structurally neutral / range-bound; 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. TERN positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TERN alongside the broader basket even when TERN-specific fundamentals are unchanged. Short-premium structures like a iron condor on TERN carry tail risk when realized volatility exceeds the implied move; review historical TERN earnings reactions and macro stress periods before sizing. Always rebuild the position from current TERN chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on TERN?
- A iron condor on TERN is the iron condor strategy applied to TERN (stock). The strategy is structurally neutral / range-bound: An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes. With TERN stock trading near $54.63, the strikes shown on this page are snapped to the nearest listed TERN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TERN iron condor max profit and max loss calculated?
- Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit. For the TERN iron condor priced from the end-of-day chain at a 30-day expiry (ATM IV 10.30%), the computed maximum profit is $12.00 per contract and the computed maximum loss is -$338.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TERN iron condor?
- The breakeven for the TERN iron condor priced on this page is roughly $52.52 and $57.53 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 TERN market-implied 1-standard-deviation expected move is approximately 2.95%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a iron condor on TERN?
- Iron condors on TERN are a delta-neutral premium-collection structure that profits if TERN stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current TERN implied volatility affect this iron condor?
- TERN ATM IV is at 10.30% with IV rank near 1.76%, 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.