HomeMarket NewsCommit To Buy Palo Alto Networks At $185, Earn 5.5% Using Options

Commit To Buy Palo Alto Networks At $185, Earn 5.5% Using Options

Actionable Trade Ideas

always free

Investors eyeing a purchase of Palo Alto Networks, Inc (Symbol: PANW) shares, but cautious about paying the going market price of $299.57/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2026 put at the $185 strike, which has a bid at the time of this writing of $10.20. Collecting that bid as the premium represents a 5.5% return against the $185 commitment, or a 3.3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Selling a put does not give an investor access to PANW’s upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $185 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless Palo Alto Networks, Inc sees its shares decline 38.3% and the contract is exercised (resulting in a cost basis of $174.80 per share before broker commissions, subtracting the $10.20 from $185), the only upside to the put seller is from collecting that premium for the 3.3% annualized rate of return.

Below is a chart showing the trailing twelve month trading history for Palo Alto Networks, Inc, and highlighting in green where the $185 strike is located relative to that history:


The chart above, and the stock’s historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2026 put at the $185 strike for the 3.3% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for Palo Alto Networks, Inc (considering the last 251 trading day closing values as well as today’s price of $299.57) to be 50%. For other put options contract ideas at the various different available expirations, visit the PANW Stock Options page of StockOptionsChannel.com.

nslideshowTop YieldBoost Puts of the Nasdaq 100 Β»

Also see:

Β• CIVI Price Target
Β• Funds Holding VRX
Β• LIVC Insider Buying

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.