Investors interested in purchasing Applied Digital Corporation (APL Digital Corporation, Symbol: APLD) are considering alternative strategies due to the current market price of $35.55 per share. One notable strategy is selling the January 2028 put option at the $13 strike, which currently has a bid of $2.98, offering a potential return of 22.9%, equating to an annualized rate of 11.6%. This strategy provides income through premium collection, without actual ownership unless the option is exercised.
The contract would only be exercised if the share price declines by 63.4% to below $13, resulting in a cost basis of $10.02 per share before broker commissions. The trailing twelve-month volatility for APLD stands at 123%, providing a context for assessing the associated risks and benefits of the put option strategy based on historical price behavior.
