Investors Consider Selling Puts for Solventum Corp Stock

For investors interested in Solventum Corp (Symbol: SOLV), currently priced at $73.43 per share, exploring alternative strategies like selling puts could be beneficial. One notable option is the December put at the $50 strike, which is bidding at $1.10. This premium offers a 2.2% return relative to the $50 commitment, equating to an annualized return of 2.9%—what we refer to as the YieldBoost at Stock Options Channel.

It’s important to note that selling a put does not provide the same upside potential as owning shares. A put seller only acquires shares if the contract is exercised. The counterparty benefits from exercising the put at the $50 strike only if it yields a better outcome than selling at the current market price. If Solventum Corp’s shares fall 32.4%, resulting in a cost basis of $48.90 per share (after accounting for the $1.10 premium), the put seller’s only upside remains the premium for the 2.9% annualized rate of return.

The following chart illustrates Solventum Corp’s trailing twelve-month trading history, with the $50 strike clearly indicated in green:

To evaluate whether selling the December put at the $50 strike for a 2.9% annualized return is a worthwhile risk-reward scenario, consider the chart alongside a fundamental analysis. We’ve calculated the trailing twelve-month volatility for Solventum Corp at 32%, using the closing values from the last 241 trading days and today’s stock price of $73.43. For more put options with various expiration dates, visit the SOLV Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Thursday, put volume among S&P 500 components reached 1.17 million contracts, while call volume hit 1.52 million, giving a put:call ratio of 0.77 for the day. This figure is notably high compared to the long-term median put:call ratio of 0.65, indicating an increase in put buyers relative to call buyers in today’s options trading environment. Find out more about the top 15 call and put options that traders are discussing today.

Top YieldBoost Puts of the S&P 500 »

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