New Options Available for Recursion Pharmaceuticals: A Closer Look at the April 4th Contracts

Investors interested in Recursion Pharmaceuticals Inc (Symbol: RXRX) can explore some new options that became available today, expiring on April 4th. At Stock Options Channel, our YieldBoost analysis has examined the RXRX options chain to highlight one put and one call contract worth noting.

Put Option Details: An Attractive Entry Point?

The put contract at the $9.50 strike price currently bids at 75 cents. For an investor looking to enter a trade, selling this put means agreeing to buy the stock at $9.50 while pocketing the premium. This effectively lowers the cost basis for the shares to $8.75, before broker fees. Considering the current trading price of $9.77 per share, this option could serve as an appealing alternative for those interested in RXRX.

This $9.50 strike price represents a nearly 3% discount to the current trading price, meaning it is currently out-of-the-money. Analysts estimate a 57% chance that this put contract may expire worthless. Stock Options Channel tracks these probabilities over time and will feature a chart on our website to reflect changes. If the contract does expire worthless, this would yield a 7.89% return on the cash commitment, amounting to an impressive 58.86% on an annualized basis, a concept we refer to as YieldBoost.

Below has been provided a chart detailing the trailing twelve-month trading history for Recursion Pharmaceuticals Inc, highlighting where the $9.50 strike position falls:

Call Option Insights: Potential Returns with Caution

Shifting to the call side, a $10.00 strike price call contract is currently available with a bid of 35 cents. If an investor buys RXRX shares at the current price of $9.77 and sells this call as a “covered call,” they commit to selling the stock at $10.00. Including the premium collected, this setup indicates a potential total return of 5.94% if the stock is called away at the April 4th expiration.

However, this strategy could leave some gains unrealized if RXRX shares rise significantly. Hence, it’s important for investors to consider both the trading history of RXRX and the company’s fundamentals. The following chart shows the previous twelve months of trading history, with the $10.00 strike highlighted:

This $10.00 strike effectively represents around a 2% premium over the current price, thus rendering it out-of-the-money. There’s a 47% probability that this covered call may expire worthless, allowing the investor to retain both the shares and the premium received. Stock Options Channel will continue monitoring these odds, offering updates on our contract detail page, including the trading history of these options. If the covered call expires worthless, the premium translates to a 3.58% extra return or an annualized 26.71% yield boost.

Volatility Considerations

The implied volatility for the put contract stands at 158%, while the call contract shows an implied volatility of 155%. In contrast, the actual trailing twelve-month volatility — based on the last 250 trading days and today’s price of $9.77 — is calculated at 84%. Investors can explore more options strategies at StockOptionsChannel.com.

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