Strategies for Investing in Astrana Health Inc: Selling Puts Explained

Investors interested in Astrana Health Inc (Symbol: ASTH) Stock may find themselves hesitating to pay the current market price of $29.57 per share. One alternative strategy to consider is selling put options. Notably, the November put with a $22.50 strike price has a bid of $1.80 at this time. By collecting this bid, investors could secure an 8% return on a $22.50 commitment, translating to a 12.5% annualized rate of return, which Stock Options Channel refers to as the YieldBoost.

Selling a put option does not provide access to ASTH’s potential upside like owning shares would. The put seller only acquires shares if the contract is exercised. This occurs if exercising the contract results in a better outcome than the current market price. Should Astrana Health’s shares drop by 23.9%, resulting in a contract exercise, the cost basis for the underlying shares would be $20.70 (after subtracting the $1.80 premium from the $22.50 strike price). Therefore, the only benefit for the put seller is the premium collected, offering a potential annualized return of 12.5% unless market conditions change significantly.

Below is a chart that illustrates the trailing twelve-month trading history for Astrana Health Inc, highlighting the position of the $22.50 strike in relation to this history:

The chart above, paired with the Stock‘s historical volatility, serves as a useful tool in combination with fundamental analysis. Investors can evaluate whether selling the November put at the $22.50 strike for a 12.5% annualized return provides adequate reward relative to the associated risks. Astrana Health Inc’s trailing twelve-month volatility, calculated using the last 251 trading days as well as today’s price of $29.57, stands at 57%. For additional put options contract ideas across various expirations, explore the ASTH Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Wednesday, put volume across S&P 500 components reached 837,454 contracts, with matching call volume of 837,454. This resulted in a put:call ratio of 0.75 for the day, which is above the long-term median of 0.65. This indicates that, relative to call buyers, there are more put buyers than typically expected in today’s options trading.

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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.