Investors interested in Power Solutions International Inc. (PSIX) shares, currently trading at $63.43, may consider an alternative strategy by selling put options. Notably, the August 2026 put at the $40 strike is offering a bid of $5.00. This transaction provides an expected return of 12.5% on the $40 commitment, equating to a 19.4% annualized rate of return.
If the stock price drops 36.3% or more, the option could be exercised, resulting in a cost basis of $35.00 per share after accounting for the premium. The historical volatility of PSIX is calculated at 97%, providing context for evaluating the risk and potential rewards associated with this investment strategy.
