VSTM Iron Condor 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 iron condor on VSTM?
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 VSTM snapshot
As of June 30, 2026, spot at $3.88, ATM IV 135.90%, IV rank 27.57%, expected move 38.96%. The iron condor 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 17-day expiry.
Why this iron condor structure on VSTM specifically: VSTM IV at 135.90% is on the cheap side of its 1-year range, which means a premium-selling VSTM iron condor collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 38.96% (roughly $1.51 on the underlying). The 17-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 $3.88 per share and to the trader's directional view on VSTM stock.
VSTM iron condor setup
The VSTM 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 VSTM near $3.88, the first option leg uses a $4.07 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 17-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) |
|---|---|---|---|
| Sell 1 | Call | $4.07 | N/A |
| Buy 1 | Call | $4.27 | N/A |
| Sell 1 | Put | $3.69 | N/A |
| Buy 1 | Put | $3.49 | N/A |
VSTM iron condor 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 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.
VSTM iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor 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 iron condor on VSTM
Iron condors on VSTM are a delta-neutral premium-collection structure that profits if VSTM stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
VSTM thesis for this iron condor
The market-implied 1-standard-deviation range for VSTM extends from approximately $2.37 on the downside to $5.39 on the upside. A VSTM iron condor is a delta-neutral premium-collection structure that pays off when VSTM 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 VSTM IV rank near 27.57% 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 VSTM at 135.90%. 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 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. 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. Short-premium structures like a iron condor on VSTM carry tail risk when realized volatility exceeds the implied move; review historical VSTM earnings reactions and macro stress periods before sizing. Always rebuild the position from current VSTM chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on VSTM?
- A iron condor on VSTM is the iron condor strategy applied to VSTM (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 VSTM stock trading near $3.88, 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 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 VSTM iron condor priced from the end-of-day chain at a 30-day expiry (ATM IV 135.90%), 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 iron condor?
- The breakeven for the VSTM iron condor 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 38.96%; 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 VSTM?
- Iron condors on VSTM are a delta-neutral premium-collection structure that profits if VSTM stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current VSTM implied volatility affect this iron condor?
- VSTM ATM IV is at 135.90% with IV rank near 27.57%, 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.