For investors eyeing a stake in Enova International Inc (Symbol: ENVA) but cautious about the current market price of $59.81/share, the prospect of selling puts may be an attractive alternative strategy to pursue. Among the various put contracts available, the December put at the $45 strike stands out, carrying a bid of $2.05 at the time of writing. Garnering this bid as the premium translates to a 4.6% return against the $45 commitment, or a robust 5.4% annualized rate of return. At Stock Options Channel, this is termed the YieldBoost.

Committing to selling a put does not endow an investor with access to ENVA’s upside potential as owning shares would, as the put seller would only acquire shares if the contract is exercised. Furthermore, the party on the other side of the contract would only benefit from exercising at the $45 strike if it yields a superior outcome to selling at the prevailing market price. Therefore, the only upside for the put seller is in collecting the premium for the compelling 5.4% annualized rate of return, unless Enova International Inc experiences a 25.8% decline, leading to the contract being exercised.

A visual representation of the trailing twelve-month trading history for Enova International Inc is depicted below, with the $45 strike highlighted in green relative to that context:

Assessing the chart above and the stock’s historical volatility, in conjunction with fundamental analysis, can serve as a useful guide to determine whether selling the December put at the $45 strike for the compelling 5.4% annualized rate of return represents a favorable reward for the associated risks. The trailing twelve-month volatility for Enova International Inc, factoring in the last 251 trading day closing values and today’s price of $59.81, is calculated at 41%. For further put options contract ideas at diverse available expirations, refer to the ENVA Stock Options page of StockOptionsChannel.com. trading day.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.