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On October 3, 2023, SiriusXM Holdings Inc (NASDAQ: SIRI) commenced trading for new options with a January 2026 expiration. A notable put contract at the $21.00 strike price has a current bid of 66 cents, implying an effective cost basis of $20.34 for investors if the option is sold to open.
At the time of writing, SiriusXM’s stock price is $21.52, indicating the $21.00 strike price is approximately 2% lower than the current trading price. The odds of the put contract expiring worthless are estimated at 58%, and should it expire, the premium would yield a 3.14% return on the cash commitment, or an annualized return of 22.94%.
The implied volatility of the discussed put contract is 63%, while the actual trailing twelve-month volatility is calculated at 44% based on the last 250 trading days.
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