Investors in Brown & Brown Inc (BRO) can now access new options expiring in March 2027. A put contract available at a $65 strike price currently has a bid of $4.00, allowing sellers to potentially purchase the stock for an effective cost basis of $61.00, which is approximately a 5% discount from the current trading price of $68.54. Analytics suggest a 65% chance the put will expire worthless, providing a potential return of 6.15%, or 9.13% annualized.
Additionally, a call contract at a $70 strike price is priced at $6.10. Investors buying shares at $68.54 and selling this covered call could see a total return of 11.03% if the stock is called away by March 2027, assuming current conditions. The chances of this contract expiring worthless stand at 45%, which could yield an annualized return of 13.21% if retained.
Implied volatility for the put is 37%, while the call’s implied volatility is 35%. Actual trailing twelve-month volatility is calculated at 31%.
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