Investors in Apollo Global Management Inc (APO) have access to new options expiring on November 20, 2023. A notable opportunity includes a put contract at the $135.00 strike price, currently bid at $9.80, which could lower the effective purchase price of the stock to $125.20 given its current trading price of $137.54. This represents a 2% discount, with a 59% chance that the put contract could expire worthless, potentially yielding a 7.26% return on cash commitment or 16.87% annualized.
On the call options side, a contract at the $140.00 strike price is currently taking bids at $11.40. If executed as a covered call, selling this contract would mean committing to sell shares at $140.00, generating a total return of 10.08% if the contract is exercised by expiration. There’s a 47% chance this call contract could also expire worthless, allowing the investor to keep both the shares and premium, equivalent to an 8.29% extra return or 19.26% annualized.
Implied volatility for the put and call contracts stands at 37% and 38% respectively, while the actual trailing twelve-month volatility is calculated at 35%.
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