Investors in SBA Communications Corp (NASDAQ: SBAC) are engaging with new options contracts set to expire on April 17, 2024. Notably, a put contract at the $185 strike price has a current bid of $2.40, creating a potential purchase opportunity at a cost basis of $182.60, which is approximately a 6% discount from the current trading price of $197.33 per share. This scenario offers a 74% probability that the put contract could expire worthless, yielding a 1.30% return on cash commitment, or 8.46% annualized.
On the calls side, a call contract at the $200 strike price is currently bid at $6.60. If an investor purchases SBAC shares at $197.33 and sells this covered call, they may achieve a total return of 4.70% if the stock is called away at expiration. The $200 strike is roughly 1% above the current trading price, allowing for a 50% chance that the contract could expire worthless, in which case the investor retains both the premium and shares, resulting in a potential 3.34% increase in returns, or 21.82% annualized.
Implied volatility for the put contract is at 32%, while the call contract shows 28%. The trailing twelve-month volatility for SBAC is calculated to be 25%.
