Wayfair Inc (Symbol: W) initiated trading of new options today, targeting a June 2027 expiration. Among the notable contracts is a put at the $85.00 strike price with a current bid of $16.00, equating to a cost basis of $69.00 once the premium is considered. This represents an 8% discount off the current trading price of $92.17 per share. The odds of this put contract expiring worthless stand at 70%, promising an 18.82% return on cash commitment or 19.91% annualized, termed as the YieldBoost.
On the call side, a contract at the $105.00 strike price has a current bid of $19.00. If an investor buys shares at $92.17 and sells this call, they could see a total return of 34.53% if the stock is called away at expiration. This strike represents a 14% premium to the current price, with a 42% chance of the contract expiring worthless, allowing investors to retain both their shares and the premium, leading to a potential 20.61% return or 21.81% annualized.
The implied volatility for the put contract is 70%, while for the call, it’s 69%. The trailing twelve-month volatility is calculated at 65%.
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