New Options Open for Enovix Corp: Analyzing Opportunities Ahead

Potential Gains from the December 20th Contracts

Today, investors in Enovix Corp (Symbol: ENVX) gained access to new options expiring on December 20th. Stock Options Channel has identified significant contracts within the options chain, including one put and one call contract worth examining.

Put Contract Insight

The put contract at a $12.00 strike price currently has a bid of $1.05. If an investor sells to open this put contract, they agree to buy the stock at $12.00 while also collecting the premium. This effectively lowers the cost basis to $10.95 per share (before any broker commissions). This could be an appealing option for those already interested in acquiring ENVX shares at today’s price of $12.75 each.

Notably, the $12.00 strike price is about 6% lower than the stock’s current trading value, indicating a potential downside. Currently, analytical data estimates a 65% chance that this put contract might expire worthless. Stock Options Channel will monitor these odds and provide updates on our website. If the contract does expire worthless, the premium would yield an 8.75% return on the cash commitment, equivalent to an annualized return of 47.64%, a figure we refer to as the YieldBoost.

Historical Trading Context

Below is a chart illustrating the trailing twelve months of Enovix Corp’s trading activity, showing where the $12.00 strike is positioned relative to this history:

Exploring the Call Contract

Shifting focus to the calls side, a call contract at a $15.00 strike price has a bid of $1.36. Should an investor purchase ENVX shares at the current price of $12.75 and simultaneously sell to open this call contract, they commit to selling the shares at $15.00. With the additional premium collected, the total return would amount to 28.31% if the shares are called away at expiration (excluding any dividends and broker commissions).

However, if ENVX shares make significant gains, the full potential upside could be lost, making it crucial for investors to consider both the recent trading history and the company’s fundamentals. Below is a chart of the trailing twelve months of trading for ENVX, with the $15.00 strike highlighted:

Evaluating Risks and Returns

The $15.00 strike is about 18% above the current trading price, indicating it is out-of-the-money. There is a chance that the covered call could also expire worthless, allowing the investor to retain both the shares and the premium. Current analysis shows a 49% likelihood of that outcome. We’ll be tracking these odds on our website, providing charts of this data as well.

If the covered call expires worthless, the collected premium would amount to a 10.67% enhancement on the investor’s return or a remarkable 58.07% annualized increase, again categorized as a YieldBoost.

Volatility Overview

In terms of volatility, the **implied volatility** for the put contract stands at 118%, while the call contract registers at 132%. In contrast, the actual trailing twelve-month volatility, based on the past 250 trading days along with today’s $12.75 price, is calculated at 96%. Investors interested in additional options contract strategies can explore opportunities at StockOptionsChannel.com.

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• Institutional Holders of DFND

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