XOMA Long Put Strategy
XOMA (XOMA Royalty Corp.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
XOMA Royalty Corp. operates as a biotechnology royalty aggregator in Europe, the United States, and the Asia Pacific. The company engages in helping biotech companies for enhancing human health. It acquires the potential future economics associated with pre-commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. The company focuses on early to mid-stage clinical assets primarily in Phase 1 and 2 with commercial sales potential that are licensed to partners. It has a portfolio with approximately 70 assets. XOMA Corporation was incorporated in 1981 and is headquartered in Emeryville, California.
XOMA (XOMA Royalty Corp.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $507.0M, a trailing P/E of 15.78, a beta of 0.90 versus the broader market, a 52-week range of 22.29-42.81, average daily share volume of 225K, a public-listing history dating back to 1986, approximately 13 full-time employees. These structural characteristics shape how XOMA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.90 places XOMA roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. XOMA pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a long put on XOMA?
A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration.
Current XOMA snapshot
As of May 15, 2026, spot at $41.67, ATM IV 9.60%, IV rank 0.16%, expected move 2.75%. The long put on XOMA 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 long put structure on XOMA specifically: XOMA IV at 9.60% is on the cheap side of its 1-year range, which favors premium-buying structures like a XOMA long put, with a market-implied 1-standard-deviation move of approximately 2.75% (roughly $1.15 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 XOMA expiries trade a higher absolute premium for lower per-day decay. Position sizing on XOMA should anchor to the underlying notional of $41.67 per share and to the trader's directional view on XOMA stock.
XOMA long put setup
The XOMA long 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 XOMA near $41.67, the first option leg uses a $41.67 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed XOMA 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 XOMA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $41.67 | N/A |
XOMA long put 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 strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium.
XOMA long put payoff curve
Modeled P&L at expiration across a range of underlying prices for the long put on XOMA. 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 long put on XOMA
Long puts on XOMA hedge an existing long XOMA stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying XOMA exposure being hedged.
XOMA thesis for this long put
The market-implied 1-standard-deviation range for XOMA extends from approximately $40.52 on the downside to $42.82 on the upside. A XOMA long put expresses a directional view that the underlying closes below the strike minus premium at expiration, frequently sized to hedge an existing long XOMA position with one put per 100 shares held. Current XOMA IV rank near 0.16% 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 XOMA at 9.60%. As a Healthcare name, XOMA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to XOMA-specific events.
XOMA long put positions are structurally bearish; 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. XOMA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move XOMA alongside the broader basket even when XOMA-specific fundamentals are unchanged. Long-premium structures like a long put on XOMA are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current XOMA chain quotes before placing a trade.
Frequently asked questions
- What is a long put on XOMA?
- A long put on XOMA is the long put strategy applied to XOMA (stock). The strategy is structurally bearish: A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration. With XOMA stock trading near $41.67, the strikes shown on this page are snapped to the nearest listed XOMA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are XOMA long put max profit and max loss calculated?
- Max profit equals the strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium. For the XOMA long put priced from the end-of-day chain at a 30-day expiry (ATM IV 9.60%), 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 XOMA long put?
- The breakeven for the XOMA long put 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 XOMA market-implied 1-standard-deviation expected move is approximately 2.75%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a long put on XOMA?
- Long puts on XOMA hedge an existing long XOMA stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying XOMA exposure being hedged.
- How does current XOMA implied volatility affect this long put?
- XOMA ATM IV is at 9.60% with IV rank near 0.16%, 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.