Alternative Strategies for Equinix Investors: Exploring Put Options

Maximize Potential Returns by Selling Put Options

Investors interested in Equinix Inc (Symbol: EQIX) shares may find the current market price of $883.62/share a bit high. One option to consider is selling put options, such as the intriguing December 2025 put at the $730 strike price, which has a bid of $30.30. By collecting this premium, investors can achieve a 4.2% return based on the $730 commitment, translating to a 3.6% annualized return, a strategy we refer to as the YieldBoost.

It’s important to remember that selling a put option differs from owning shares. The put seller only gains shares if the contract is exercised. For that to happen, the stock must drop to the $730 strike price, which represents a 17.5% decrease in value. In this case, the effective cost per share would drop to $699.70 after accounting for the collected premium of $30.30. If shares remain above this level, the put seller only profits from the premium, yielding a 3.6% annualized return.

Interestingly, the annualized return of 3.6% from put selling exceeds the current 1.9% annualized dividend paid by Equinix Inc by 1.7%. However, purchasing shares to receive the dividend exposes investors to greater risk, as the stock would need to decline by 17.54% to reach the $730 strike price.

When evaluating dividends, it’s crucial to recognize their unpredictability, as they often reflect each company’s profitability. Analyzing the dividend history chart for EQIX below can aid investors in assessing the likelihood of continued dividends and whether a 1.9% annual yield is a reasonable expectation.

The following chart displays the trading history for Equinix Inc over the past twelve months, highlighting the $730 strike price relative to its historical performance:

Using this chart alongside fundamental analysis can help determine if selling the December 2025 put at the $730 strike price for a 3.6% annualized return is a sound risk-reward opportunity. Our calculations show that Equinix Inc’s trailing twelve-month volatility, based on the last 251 trading sessions and today’s price of $883.62, stands at 24%. For more put options ideas with various expirations, visit the EQIX Stock Options page on StockOptionsChannel.com.

Top YieldBoost Puts of the REITs »

Additional Resources:

• Canadian Stocks Crossing Below Book Value
• ELS Dividend Growth Rate
• AOMR Average Annual Return

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.