HomeMarket NewsUnveiling Bumble's Options Trading Landscape: A Detailed Analysis

Unveiling Bumble’s Options Trading Landscape: A Detailed Analysis

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Exploring Put Contracts

As Bumble Inc. (BMBL) options for the May 3rd expiration hit the market, investors are presented with intriguing opportunities. The $10.50 strike put contract, currently priced at 35 cents, offers an unconventional path. By selling-to-open this put, investors commit to buying the stock at $10.50, effectively reducing their cost basis to $10.15. This move, though atypical, could serve as an enticing alternative, especially with shares trading at $10.93. Itโ€™s akin to discovering a hidden gem at a bustling market.

Given the $10.50 strikeโ€™s 4% discount to the current stock price, this put contract is considered out-of-the-money by that margin. Thereโ€™s a 65% chance the contract may expire without value. The current analytics project a 3.33% return on investment, translating to a 32.88% annualized returnโ€”a prospect that investors would be wise to contemplate.

Loading chart โ€” 2024 TickerTech.com

The Call Contracts: A Different Perspective

On the call front, the $11.00 strike call contract is captivating with a bid of 55 cents, offering investors another avenue. Selling a โ€œcovered callโ€ after purchasing BMBL shares at $10.93 entails committing to sell at $11.00. This maneuver could result in a 5.67% return if the stock is called away at expiration. However, prudent investors are cautioned about potentially missing out on substantial gains should BMBLโ€™s share price surge. Itโ€™s analogous to having a winning lottery ticket but opting to cash it in prematurely.

With the $11.00 strike representing a 1% premium to the current stock price, thereโ€™s a 47% chance the covered call may expire without value. The analytics propose a 5.03% additional return for investors if this were to occurโ€”a noteworthy 49.64% annualized increase, or a sweet cherry on top of the investment cake.

Loading chart โ€” 2024 TickerTech.com

Comparing Implied and Actual Volatility

Noteworthy is the 47% implied volatility for the put contract, contrasting with the 58% for the call contract. In a deeper dive into data, the trailing twelve-month volatility, considering the previous 251 trading days and the current price of $10.93, stands at 47%. This variance highlights the dynamic nature of options trading and the need for a calculated approach to decision-making.

For a plethora of put and call options contract ideas worth exploring, a visit to StockOptionsChannel.com is highly recommended.

nslideshowTop YieldBoost Calls of the S&P 500 ยป

Also see:

ย• Preferred Stock ETFs
ย• Top Ten Hedge Funds Holding TSCO
ย• PINS Options Chain

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

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