It’s been an eventful week for investors in the PROCEPT BioRobotics Corp (PRCT) as new options for the March 15th expiration became available. The current options chain has revealed one put and one call contract that are particularly intriguing from the standpoint of our YieldBoost formula at Stock Options Channel.
The put contract at the $47.50 strike price is drawing attention with a current bid of $2.35. Selling-to-open this put contract entails committing to purchase the stock at $47.50. However, the premium collected lowers the cost basis of the shares to $45.15. For an investor keen on acquiring PRCT shares, this could present an appealing alternative to the current $49.59/share price.
These puts offer an approximate 4% discount to the stock’s current trading price, positioning them out-of-the-money by that percentage. Optical odds suggest a 64% chance that the put contract might expire worthless, offering a 4.95% return on the cash commitment, or 64.59% annualized — what we at Stock Options Channel term the YieldBoost.
Call Options: Leveraging Stock Sale with a Covered Call
On the calls side, the $50.00 strike price call contract is gaining attention with a current bid of $3.20. If an investor were to sell-to-open this call contract at the current stock price of $49.59/share, they are committing to sell the stock at $50.00. The call seller would collect the premium, driving a total return of 7.28% if the stock gets called away at the March 15th expiration (before broker commissions).
With the $50.00 strike representing an approximate 1% premium to the current trading price, there’s a 47% chance the covered call contract may expire worthless. This scenario would grant the investor a 6.45% boost in extra return, or 84.24% annualized — our YieldBoost term applies here as well.
The implied volatility in the put contract example stands at 72%, while the call contract example shows 66% implied volatility. These figures are intriguing against the actual trailing twelve month volatility of 64%.
Options Trading: Present and Historical Context
These trading actions are unfolding against PROCEPT BioRobotics Corp’s historical backdrop. A chart of the trailing twelve month trading history highlights the positioning of the $47.50 and $50.00 strikes relative to historical stock performance.
Clearly, the options market is offering a range of strategic opportunities for investors, in line with the company’s overall performance and market trajectory. For more insights and ideas concerning put and call options contracts, visit StockOptionsChannel.com for a comprehensive view.
Market Insights and Final Considerations
As the market sets its sights on the March 15th options expiration, investors are presented with these pivotal choices. The week ahead promises a dynamic interplay of market forces, and strategic awareness of the multiple factors at play will be crucial for navigating this landscape successfully.
