New Options Trading Opportunities for HealthEquity Inc Investors

Investors in HealthEquity Inc (Symbol: HQY) have new options available for trading, set to expire in February 2025. Stock Options Channel has analyzed the HQY options chain and found a notable put and call contract for investor consideration.

Attractive Put Contract at $90 Strike Price

The put contract with a $90.00 strike price is currently priced at $2.00. If an investor sells-to-open this put, they agree to buy the shares at $90.00, while also collecting the option premium. This moves the effective cost per share down to $88.00, an appealing alternative to purchasing the stock at the current market price of $95.71.

Furthermore, given that the $90.00 strike price is around 6% lower than the current trading price, there is a chance the put could expire worthless. Current probabilities suggest a 71% likelihood of that occurring. Stock Options Channel will monitor these odds and provide updates on its website. Should the put contract expire worthless, the investor could enjoy a premium return of 2.22%, which annualizes to 13.75%, a figure we call YieldBoost.

Call Contract Potential at $115 Strike Price

On the calls side, a contract with a $115.00 strike price is currently available for 45 cents. If an investor buys HQY stock at $95.71 and sells this call as a “covered call,” they would be agreeing to sell their shares at $115.00. This transaction, excluding any potential dividends, could yield a total return of 20.62% if the stock is called away at expiration in February 2025.

However, if HQY shares increase significantly, the investor may miss out on additional profits. It becomes crucial to examine both the stock’s trading history and the fundamentals of the business. The trailing twelve-month chart for HQY illustrates where the $115.00 strike price falls in that context.

Because the $115.00 strike represents a 20% premium to the current trading price, there’s a chance this call could expire worthless, allowing the investor to retain both their shares and the premium received. Data suggests an 88% probability of this outcome. Investors can track changing odds and historical trading data for the option contract on Stock Options Channel’s site. If the call contract expires worthless, the collected premium would provide an additional 0.47% return, or 2.91% annualized, again termed YieldBoost.

Volatility Insights for Investors

The implied volatility for both the put and call contracts stands at approximately 35%. In comparison, the actual volatility based on the last 251 trading days, including today’s closing price of $95.71, is calculated at 32%. For further insights into potential 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.