Investors in HEICO Corp (Symbol: HEI) gained access to new options today, with contracts expiring on July 17th. A notable put contract at the $290.00 strike price has a current bid of $15.10. Selling this put would commit an investor to purchase HEICO shares at $290.00, effectively lowering the cost basis to $274.90, providing a 1% discount to the current trading price of $292.95/share. The odds of the contract expiring worthless are estimated at 58%, potentially yielding a return of 5.21% on the cash commitment or an annualized rate of 29.70%.
On the call side, a contract at the $300.00 strike price is currently bid at $14.50. If an investor buys shares at $292.95 and sells this covered call, they agree to sell at $300.00, leading to a potential total return of 7.36% at expiration, if the shares are called away. With a 50% chance of the contract expiring worthless, this could provide an additional 4.95% return or 28.23% annualized. The implied volatility of the put and call contracts stands at 40% and 37%, respectively, while the actual trailing twelve-month volatility is calculated at 31%.
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