Alternative Strategies for Investing in SiTime Corp Shares

For investors considering a stake in SiTime Corp (Symbol: SITM) at the current market price of $202.36 per share, one viable strategy is selling put options. This alternative could provide an attractive entry point if the market price is a concern. A notable opportunity available is the August put option with a $155 strike price, offering a bid of $17.70 as of this writing. Accepting this bid equates to an 11.4% return on the $155 commitment, resulting in a substantial 25.7% annualized rate of return, a metric referred to as YieldBoost by Stock Options Channel.

Selling puts offers a different approach compared to holding shares of SITM, as the seller only acquires the stock if the option is exercised. It’s important to note that the purchaser of the put contract will only exercise it if doing so is more beneficial than selling shares at the current market price. This implies that unless SiTime Corp’s shares decline by 22.3%, leading to an exercise of the contract (resulting in a cost basis of $137.30 per share after accounting for the $17.70 premium), the primary advantage for the put seller is the premium collected, which translates to a 25.7% annualized return.

For better clarity, the chart below illustrates SiTime Corp’s trading history over the past twelve months, marking the position of the $155 strike price in green:

This historical chart, combined with SiTime Corp’s volatility metrics, will help investors assess whether selling the August put option at the $155 strike for a potential 25.7% annual return justifies the associated risks. The calculated twelve-month volatility for SiTime Corp, based on the last 250 trading days and the current price of $202.36, is 76%. For additional ideas on put options with varying expiration dates, visit the SITM Stock Options page on StockOptionsChannel.com.

In mid-afternoon trading on Thursday, S&P 500 components demonstrated a put volume of 999,983 contracts and call volume at 999,983, resulting in a put:call ratio of 0.71 for the day. This ratio is noteworthy, as it is higher than the long-term median of 0.65. This data indicates a greater volume of put buyers than expected compared to historical trends. For more insights, see which 15 call and put options traders are currently discussing.

Top YieldBoost Puts of the S&P 500 »

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• Howard Marks Stock Picks
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• JUCY Options Chain

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