Investors interested in Anavex Life Sciences Corp (Symbol: AVXL) stock may find themselves hesitant to buy it at the current price of $11.03 per share. Instead, those weighing alternative strategies might consider selling put options. A notable choice is the January 2026 put contract with a $7 strike price; it has a bid of $2.00 at this moment. Selling this put offers an attractive 28.6% return on the $7 commitment, translating to a 28.1% annualized rate of return, which we at Stock Options Channel refer to as the YieldBoost.
Investors need to remember that selling a put option does not offer the same upside potential as owning shares. A put seller only acquires shares if the contract is exercised. The counterparty will only exercise the option if it proves more beneficial than selling at the current market price. For instance, unless the share price drops by 36.9%, resulting in a cost basis of $5.00 per share after accounting for the $2.00 premium, the main benefit for the put seller lies in collecting the premium, which amounts to a 28.1% annualized return.
Below is a chart detailing the trading history of Anavex Life Sciences Corp over the last twelve months, with the $7 strike price highlighted in green:
This chart, combined with the stock’s historical volatility, serves as a useful tool for evaluating whether selling the January 2026 put at the $7 strike for a 28.1% annualized return offers good reward relative to the risk involved. The trailing twelve-month volatility for Anavex Life Sciences Corp is calculated at 81%, based on the previous 250 trading days along with today’s price of $11.03. For additional put option ideas with different expiration dates, please visit the AVXL Stock Options page at StockOptionsChannel.com.
Top YieldBoost Puts of the S&P 500 »
Additional Resources:
- Cheap Stocks To Watch
- Top Ten Hedge Funds Holding BNFT
- Funds Holding BN
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
