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Investors considering Olema Pharmaceuticals Inc (Symbol: OLMA) shares, currently priced at $20.88, may explore selling put options as a strategy. Notably, the April 2026 put at the $16 strike has a bid of $2.60, offering a 16.2% return against a $16 commitment, equating to a 40.4% annualized rate of return.
For this strategy, selling the put does not provide access to potential price gains unless the contract is exercised. If Olema’s share price declines by 22.6%, the contract would be exercised, leading to a cost basis of $13.40 per share. The trailing twelve-month volatility for OLMA is calculated at 123%, which is crucial for assessing the risk versus reward in this options strategy.
During midday trading on Friday, the overall put volume among S&P 500 components reached 1.43 million contracts, matching call volume at 1.43 million, resulting in a put:call ratio of 0.72, indicating a higher than normal interest in put options compared to the long-term median of 0.65.
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