Enphase Energy and New Options: Opportunities Abound for Investors
Investors in Enphase Energy Inc. (Symbol: ENPH) are seeing new options become available today, with an expiration date of July 18th. One significant factor impacting option pricing is time value. With 100 days until expiration, these newly launched contracts provide the chance for put and call sellers to secure higher premiums compared to those with earlier expirations. Our YieldBoost formula at Stock Options Channel has analyzed the ENPH options chain and identified one put and one call contract of special interest.
Put Contract Analysis
The put contract at the $40.00 strike price currently has a bid of $2.66. If an investor sells-to-open this put contract, they commit to buying the stock at $40.00 while collecting the premium. This action effectively reduces their cost basis to $37.34 per share (excluding broker commissions). For those already looking to purchase ENPH, this presents an attractive alternative to paying the current market price of $48.83 per share.
Since the $40.00 strike price reflects about an 18% discount to the current trading price, the put contract carries a risk of expiring worthless. Current analytical data suggests a 76% chance of this happening. Stock Options Channel will track these odds over time and provide updates on our website under the contract detail page. If the put expires worthless, the premium yields a 6.65% return on the cash commitment, equating to a 24.27% annualized return—a figure we refer to as the YieldBoost.
Below is a chart depicting the trailing twelve-month trading history for Enphase Energy Inc., highlighting the position of the $40.00 strike:
Call Contract Analysis
On the calls side, the call contract at the $55.00 strike price is currently bid at $4.55. If an investor buys shares of ENPH at the recent price level of $48.83 per share and sells-to-open this call as a covered call, they would agree to sell the stock at $55.00. Including the premium, this scenario could provide a total return of 21.95% if the stock is called away at the July 18th expiration (before any broker commissions). However, if ENPH shares rise significantly, potential upside could be limited by the call contract. Hence, analyzing both the historical trading data and the company’s fundamentals becomes essential. Below is a chart illustrating ENPH’s trailing twelve-month trading history, with the $55.00 strike marked in red:
The $55.00 strike price represents an approximate 13% premium over the current stock price, which indicates a possibility for the covered call contract to also expire worthless. In that case, the investor retains both the shares of stock and the premium earned. Current data indicates a 53% chance of this outcome. We will monitor these odds and update the trading history for the option contract on our website. If the covered call contract were to expire worthless, the premium would represent an additional 9.32% return for the investor, or 34.01% annualized, also labeled as YieldBoost.
In terms of volatility, the implied volatility for the put contract is currently at 80%, while the call contract stands at 75%. Our calculations show that the actual trailing twelve-month volatility, based on the last 251 trading days in addition to today’s price of $48.83, is about 62%. For more insights into potential put and call options worth considering, visit StockOptionsChannel.com.
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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.
