Fortinet Options Trading Insights: March 2024 Contracts Unveiled

New Opportunities Emerge for Investors in Fortinet Inc (Symbol: FTNT)

Investors in Fortinet Inc (Symbol: FTNT) can now explore new options trading as of today, specifically for contracts set to expire on March 28th. According to Stock Options Channel, analysis of the FTNT options chain has revealed a put and a call contract that stand out for potential investors.

The put contract at a strike price of $99.00 currently holds a bid of $4.10. For investors choosing to sell-to-open this put contract, there’s an obligation to purchase shares at $99.00. However, by collecting the premium, the adjusted cost basis of those shares would drop to $94.90 (excluding broker fees). This option becomes quite appealing to those looking to buy FTNT shares instead of paying the current price of $105.48 per share.

Since the $99.00 strike presents an estimated 6% discount from the stock’s current trading price, this option is out-of-the-money by that percentage. There’s a 68% chance that the put contract may expire worthless, according to current analytical data which includes greeks and implied greeks. Stock Options Channel will continue to monitor these odds and share updates on their website. If the contract does expire worthless, this premium could yield a return of 4.14% on the cash commitment, or an annualized rate of 30.26% — a figure we identify as YieldBoost.

Below is a chart displaying Fortinet Inc’s trading history over the past twelve months, highlighting the relative position of the $99.00 strike:

On the calls side, there’s a call contract available at a strike price of $110.00, currently with a bid of $5.50. Investors looking to buy FTNT shares at the present price of $105.48 and then sell-to-open the call contract would be agreeing to sell shares at $110.00. This strategy would yield a total return of 9.50% (excluding dividends, if applicable) at expiration on March 28th, provided the stock gets called away. It’s essential to analyze both the company’s trading history and its fundamentals to make an informed decision, especially in the event of significant price movements.

The following chart illustrates FTNT’s twelve-month trading history, with the $110.00 strike marked in red:

This $110.00 strike represents about a 4% premium over the current stock price, meaning the call could also potentially expire worthless. In this scenario, investors would retain their shares and the collected premium. Current data indicates a 55% chance of the call contract expiring worthless. Stock Options Channel will track these odds and present updated figures on their site. If the covered call option does expire worthless, the premium received would enhance returns by 5.21%, equating to an annualized yield of 38.10%, another example of our YieldBoost.

Both the implied volatility for the put and call contracts is roughly 49%. In contrast, we calculate the trailing twelve-month volatility to be 36%, based on the last 250 trading days and today’s price of $105.48. For additional put and call contract opportunities, 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.