Investors considering a purchase of Edwards Lifesciences Corp (Symbol: EW) may find selling put options an attractive strategy. The January 2027 put at the $65 strike is currently valued at $3.40, offering a 5.2% return against a $65 commitment, equating to a 3.6% annualized rate of return.
As of mid-afternoon trading on Friday, the put volume for S&P 500 components reached 1.69 million contracts, while call volume was at 2.13 million, resulting in a put:call ratio of 0.80. This figure is significantly above the long-term median ratio of 0.65, indicating increased put buying activity compared to calls.
The trailing twelve-month volatility for Edwards Lifesciences is calculated at 26%, and shares are currently trading at $79.12. The potential for earning from the put premium exists only if the stock price decreases to $65 or lower, allowing the put seller to collect the premium while limiting exposure.
