Investors in Cognizant Technology Solutions Corp. (CTSH) saw new options contracts available for expiration on October 16th. The put option at a $40.00 strike price is currently bid at $0.40, representing a potential purchase price of $39.60 after collecting the premium. This strike price reflects a 39% discount from the current trading price of $65.50, with a 95% probability of expiring worthless, which could yield a 1.00% return on cash commitment (1.53% annualized).
On the calls side, a $67.50 strike price contract is bid at $5.40. If purchased, this would allow an investor to sell shares at $67.50 for an 11.30% total return if called away by the expiration date. This strike is approximately 3% above the current share price, with a 47% chance of expiring worthless, potentially providing an 8.24% extra return, or 12.65% annualized. Implied volatility for the put is 43% and for the call, 36%.
