New Trading Opportunities Emerge for Biogen Investors
Investors in Biogen Inc (Symbol: BIIB) now have new options available for trading, set to expire in January 2025. Stock Options Channel has analyzed the options chain and identified a notable put and call contract.
Exploring the $155.00 Put Option
The put contract with a strike price of $155.00 currently has a bid of 45 cents. An investor opting to sell-to-open this contract would agree to buy BIIB shares at $155.00 while also collecting the premium. This action effectively lowers the cost basis of the shares to $154.55, excluding broker commissions, presenting a potentially favorable alternative to purchasing shares at the current price of $159.34 each.
This $155.00 strike price represents roughly a 3% discount from the stock’s current trading price, indicating it is out-of-the-money. The analysis suggests a 64% chance that the put option might expire worthless. Stock Options Channel will monitor these odds, providing updates on their website under the contract detail page. Should the contract expire worthless, the premium would yield a 0.29% return on the cash commitment, or an annualized return of 2.41%, referred to as YieldBoost.
Below is a chart that displays the trailing twelve-month trading history for Biogen Inc, with the $155.00 strike price marked in green:
Considering the $165.00 Call Option
On the call side, the call contract with a $165.00 strike price has a current bid of 70 cents. If an investor buys BIIB stock at the price of $159.34 per share and simultaneously sells a covered call at $165.00, they would be agreeing to sell the stock for that price. This strategy could yield a total return of 3.99% if the stock is called away by the January 2025 expiration, not accounting for any dividends or broker commissions.
However, the potential for significant upside exists if BIIB shares rise above this level. Historical trading patterns and fundamental analysis should be considered in this scenario. Below is a chart showing Biogen’s trailing twelve-month trading history, with the $165.00 strike highlighted in red:
The $165.00 strike represents about a 4% premium over the current trading price, indicating it is also out-of-the-money. There is a possibility that this covered call could expire worthless, allowing the investor to retain both the shares and the premium collected. The data suggests there is a 59% chance of this occurring. Stock Options Channel will continue to track these odds and display updates on the contract detail page.
If the covered call expires worthless, the premium would represent a 0.44% additional return for the investor, or 3.64% annualized, which is again referred to as YieldBoost.
The implied volatility for both the put and call contracts stands at approximately 32%. In comparison, the actual trailing twelve-month volatility, calculated using the last 252 trading days and the current price of $159.34, is 26%. For additional options ideas, interested investors can explore StockOptionsChannel.com.
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Additional Resources:
- Joel Greenblatt Stock Picks
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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.
