VSTM Collar Strategy
VSTM (Verastem, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Verastem, Inc. is an emerging biopharmaceutical company dedicated to the creation and commercialization of innovative therapeutic agents for cancer treatment. A primary asset in its pipeline is VS-6766, a novel dual RAF/MEK inhibitor that operates by a "clamp" mechanism. This unique action effectively blocks the kinase activity of MEK and disrupts RAF's ability to phosphorylate MEK. The company is actively advancing several clinical trials. RAMP 201 is an adaptive, two-part, multicenter, randomized, open-label study designed to assess both the efficacy and safety of VS-6766, administered alone or in combination with defactinib. Defactinib is an oral small molecule inhibitor of focal adhesion kinase (FAK), and this trial targets patients with recurrent low-grade serous ovarian cancer.
VSTM (Verastem, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $262.0M, a beta of 0.27 versus the broader market, a 52-week range of 3.43-11.25, average daily share volume of 2.4M, a public-listing history dating back to 2012, approximately 78 full-time employees. These structural characteristics shape how VSTM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.27 indicates VSTM 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 collar on VSTM?
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 VSTM snapshot
As of June 29, 2026, spot at $3.83, ATM IV 147.40%, IV rank 30.38%, expected move 42.26%. The collar on VSTM 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 18-day expiry.
Why this collar structure on VSTM specifically: IV regime affects collar pricing on both sides; mid-range VSTM IV at 147.40% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 42.26% (roughly $1.62 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated VSTM expiries trade a higher absolute premium for lower per-day decay. Position sizing on VSTM should anchor to the underlying notional of $3.83 per share and to the trader's directional view on VSTM stock.
VSTM collar setup
The VSTM 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 VSTM near $3.83, the first option leg uses a $4.02 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VSTM chain at a 18-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 VSTM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $3.83 | long |
| Sell 1 | Call | $4.02 | N/A |
| Buy 1 | Put | $3.64 | N/A |
VSTM collar risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
VSTM collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on VSTM. 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.
When traders use collar on VSTM
Collars on VSTM hedge an existing long VSTM 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.
VSTM thesis for this collar
The market-implied 1-standard-deviation range for VSTM extends from approximately $2.21 on the downside to $5.45 on the upside. A VSTM collar hedges an existing long VSTM 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 VSTM IV rank near 30.38% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on VSTM should anchor more to the directional view and the expected-move geometry. As a Healthcare name, VSTM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VSTM-specific events.
VSTM 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. VSTM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VSTM alongside the broader basket even when VSTM-specific fundamentals are unchanged. Always rebuild the position from current VSTM chain quotes before placing a trade.
Frequently asked questions
- What is a collar on VSTM?
- A collar on VSTM is the collar strategy applied to VSTM (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 VSTM stock trading near $3.83, the strikes shown on this page are snapped to the nearest listed VSTM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are VSTM 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 VSTM collar priced from the end-of-day chain at a 30-day expiry (ATM IV 147.40%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a VSTM collar?
- The breakeven for the VSTM collar priced on this page is no defined breakeven on the modeled curve 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 VSTM market-implied 1-standard-deviation expected move is approximately 42.26%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on VSTM?
- Collars on VSTM hedge an existing long VSTM 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 VSTM implied volatility affect this collar?
- VSTM ATM IV is at 147.40% with IV rank near 30.38%, 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.