Investors interested in purchasing shares of Frontier Group Holdings Inc (ULCC), currently priced at $4.62, can consider selling put options as an alternative strategy. One notable option is the January 2027 put at a $2 strike price, offering a bid of 20 cents, which translates to a potential 10% return on the $2 commitment, or an annualized return of 9.6%.
The put seller assumes no direct upside from Frontier’s share price unless the option is exercised, which occurs only if the stock drops significantly—specifically, by 56.6%—making the effective cost basis $1.80 per share, after accounting for the premium collected. Frontier Group’s historical volatility is noted at 82%, providing context for the risk-reward assessment of this put option relative to past trading performance.
