Investors in Sprouts Farmers Market Inc (SFM) are engaging with new options trading this week, specifically for contracts expiring on August 15. The put contract at the $160.00 strike price has a current bid of $10.20, allowing investors interested in purchasing shares at a cost basis of $149.80 to avoid the current share price of $164.12.
The $160.00 strike represents a 3% discount to the current trading price, with a 58% probability of expiring worthless, which would yield a 6.38% return on cash commitment or 41.55% annualized. Additionally, a call contract at the $165.00 strike price has a bid of $10.30, offering a potential return of 6.81% if exercised based on the current stock price.
Both contracts exhibit implied volatilities of 48% and 47% for the put and call respectively, while the actual trailing twelve-month volatility is calculated at 39%.
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