Embarking on an intense and intricate journey into the world of financial options, investors in Ardelyx Inc (Symbol: ARDX) were greeted with the dawn of new opportunities today, as options for the May 10th expiration became available. At Stock Options Channel, our keen-eyed YieldBoost formula has meticulously scoured through the ARDX options chain for these fresh May 10th contracts, zeroing in on a put and a call contract that stand out among the rest.
Exploring Put Contracts
Delving deeper, the put contract beckoning at the $5.50 strike price entices with a current bid of 5 cents. For investors willing to sail into this territory, the journey involves a commitment to purchase the stock at $5.50, garnished with the collection of the premium. This tantalizing offer could lower the cost basis of the shares to a mere $5.45 (prior to broker commissions), a substantial discount from the current price of $7.47 per share.
Painting a picture of possibility, the $5.50 strike represents a bold 26% discount from the stock’s current price – an out-of-the-money omen, if you will. With a 78% likelihood of the put contract expiring fruitless, the odds are carefully being monitored over time. Should the stars align and the contract reaches maturity without value, the premium harvested would yield a 0.91% return, or a mesmerizing 7.72% annualized – an offering we affectionately term as the YieldBoost.
Unlocking Calls Strategy
Shifting tides to the calls territory, the call contract lingering at the $8.50 strike price presents a bid of 5 cents. Venturing into this realm involves purchasing ARDX shares at the current market rate of $7.47 and setting forth into the world of “covered calls,” promising to vend the stock at $8.50. This voyage could yield a total return of 14.46% if the stock is called away upon the May 10th expiration, sans dividends, of course.
Yet, as the call contract dances out-of-the-money at a 14% premium to the current stock price, a hint of possibility fills the air. With a potential 47% chance of the covered call contract rendering worthless, the odds remain under close watch. Should fate decide to let the contract fade into oblivion, the investor would retain both their shares and the collected premium, offering an extra boost of 0.67% in return or 5.68% annually – a phenomenon affectionately known as the YieldBoost.
Embracing Volatility
In this intricate waltz of options, the implied volatility in the put contract echoes at 235%, while the call contract resonates at 169%. Meanwhile, the true trailing twelve-month volatility stands at a mere 71%, a testament to the unpredictable nature of the financial seas. Curious minds seeking more option ideas are encouraged to embark on a voyage to StockOptionsChannel.com
As the sun sets on the day’s trading endeavors, the allure of ARDX options beckons, promising a journey filled with twists and turns, risk and reward. The world of financial markets is a wild and untamed frontier, where the brave venture forth in search of fortune amidst the chaos of numbers and analytics.
