Nextracker Inc’s New Options Trading: Opportunities Amid Market Fluctuations

Investors in Nextracker Inc (Symbol: NXT) can now explore new options that began trading this week, set to expire in January 2027. With 808 days remaining until expiration, these contracts may provide an opportunity for sellers of puts and calls to obtain higher premiums compared to shorter-term contracts.

Using our YieldBoost formula at Stock Options Channel, we’ve analyzed the NXT options chain and identified two noteworthy contracts: one put and one call.

Insights on the Put Contract

The put contract with a $30.00 strike price currently has a bid of $7.10. If an investor sells this put contract, they are agreeing to buy the stock at $30.00 while collecting the premium, effectively lowering their cost basis to $22.90 (before broker commissions). For those interested in buying NXT shares at the current market price of $31.87, this could be an appealing option.

The $30.00 strike price is roughly 6% lower than the current trading price, meaning it is out-of-the-money by that amount. There’s a 74% chance, based on current analytics, that this contract may expire worthless. Stock Options Channel will monitor these odds over time, providing updated charts on our website. If the put expires worthless, the premium represents a 23.67% return on the cash commitment, or an annualized return of 10.69%, which we term the YieldBoost.

Analyzing the Call Contract

Shifting to the calls, the contract with a $50.00 strike price is currently bidding at $6.30. An investor purchasing NXT stock at $31.87 and selling this call as a “covered call” commits to selling the shares at $50.00. With the premium collected, the total return could reach 76.66% if the stock is called away by January 2027 (excluding any dividends and broker commissions). However, if NXT shares rise significantly, this strategy may limit potential gains.

Notably, the $50.00 strike price is about 57% above the current stock price, making it out-of-the-money by that percentage. There is a 48% possibility that this covered call may also expire worthless, allowing the investor to retain both their shares and the premium. If this occurs, the premium collected would equate to a 19.77% additional return or an 8.93% annualized return, again referred to as the YieldBoost.

The implied volatility for the put contract is 60%, while the call contract’s implied volatility is at 57%. In contrast, the actual trailing twelve-month volatility, based on the last 251 trading days and the current price of $31.87, stands at 56%. For more ideas on put and call options contracts, visit StockOptionsChannel.com.

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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.