New Options Trading for Rapid7 Inc: Opportunities for Investors
Investors in Rapid7 Inc (Symbol: RPD) have new options starting trading today, set to expire in March 2025. With 133 days until expiration, these contracts present a chance for sellers of puts or calls to earn higher premiums compared to those with nearer expiration dates. Our YieldBoost formula at Stock Options Channel has identified one notable put contract and one call contract from the new March 2025 offerings.
Put Contract Insights
The highlighted put contract has a $37.00 strike price and a current bid of 60 cents. If an investor sells this put contract, they agree to buy the stock at $37.00 while collecting the 60-cent premium. This effectively reduces their cost basis in the shares to $36.40, assuming no broker commissions. For those already considering buying RPD shares at the current price of $40.12, this option could be an appealing alternative.
Since the $37.00 strike is about an 8% discount to the current trading price, it could potentially expire worthless. Current data suggests a 71% chance of this happening. Stock Options Channel will monitor these odds over time, presenting insights on our website. Should the contract expire worthless, the premium received would yield a 1.62% return on cash committed, or an annualized 4.45% — what we call the YieldBoost.
Visualizing RPD’s Trading History
Below is a chart showcasing the trailing twelve-month trading history for Rapid7 Inc, indicating the position of the $37.00 strike price in green:
Call Contract Overview
Examining the call side, the call contract at the $46.00 strike price has a current bid of $1.80. If an investor buys RPD stock today at $40.12 and then sells this call as a “covered call,” they agree to sell the stock at $46.00. Including the premium collected, this would yield a total return of 19.14% if the stock is called away at the March 2025 expiration (excluding dividends and broker commissions). However, significant upside potential could remain if RPD shares experience substantial growth. Hence, analyzing past trading history and business fundamentals is crucial.
Below is a chart displaying RPD’s trailing twelve-month trading history, highlighting the $46.00 strike in red:
The $46.00 strike represents about a 15% premium to RPD’s current trading price. There is a chance this covered call could expire worthless, allowing the investor to retain both shares and the collected premium. Current analysis indicates a 59% probability of this outcome. We will continuously track these odds on our website.
Should the covered call contract expire worthless, the received premium would provide a 4.49% additional return or an annualized 12.32% — another example of our YieldBoost.
In terms of volatility, the put contract has an implied volatility of 45%, while the call contract displays 48%. We estimate the actual trailing twelve-month volatility to be 42%, based on the last 251 trading day closing values, including today’s price of $40.12. For more insights into other put and call options contracts, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
