Investors considering Otis Worldwide Corp (Ticker: OTIS) are currently faced with a market price of $86.78 per share. As an alternative strategy, selling put options may be beneficial. Notably, the March 2026 put at the $82.50 strike is priced with a bid of $2.80, offering a 3.4% return on the commitment, equating to a 6% annualized yield.
Selling this put does not provide upside potential like owning shares would, as the seller only gains shares if the contract is exercised, which occurs if the stock drops 5.1% or more. The annualized return of 6% from the put exceeds the 1.9% annualized dividend yield of Otis Worldwide, thus presenting a better income opportunity unless the stock price falls significantly.
Otis Worldwide’s historical volatility is calculated at 25%, using the last 249 trading days. The analysis of the stock’s price movement alongside dividend history is crucial for assessing the risk-reward profile of selling the put option.
