Investors weighing a purchase of Super Group Ltd (Symbol: SGHC) stock at the current market price of $3.23/share might find an enticing alternative strategy by considering selling puts, particularly the July put at the $3 strike. This put contract boasts a 10% return or a 23.4% annualized rate of return – dubbed the YieldBoost at Stock Options Channel.
While selling a put does not offer the same potential for upside as owning shares, it does provide an opportunity to acquire shares if the contract is exercised. However, the put seller only benefits if the exercise results in a superior outcome to selling at the prevailing market price. Effectively, unless Super Group Ltd witnesses a 6.5% decline and the contract is exercised, the put seller’s only gains come from collecting the premium for the 23.4% annualized rate of return.
The trailing twelve-month trading history for Super Group Ltd illustrates the $3 strike in relation to the stock’s performance, and concerned investors can reference the chart and historical volatility alongside fundamental analysis to assess if selling the July put at the $3 strike represents favorable reward for the associated risks. The trailing twelve-month volatility for Super Group Ltd, based on the last 251 trading day closing values and the current price of $3.23, stands at 56%. For additional put options contract ideas at varying expirations, a visit to the SGHC Stock Options page of StockOptionsChannel.com is encouraged.
In mid-afternoon trading on Wednesday, the put volume among S&P 500 components amounted to 1.94M contracts, mirroring the call volume. This 1:1 put:call ratio, exceeding the long-term median of .65, suggests more put buyers than expected in today’s options trading.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
