Robinhood Markets Inc (HOOD) launched new options trading today, expiring on August 22. Of particular interest are a $90.00 strike put option with a current bid of $8.15, yielding an effective cost basis of $81.85 for investors willing to buy at that price, a 4% discount from the current share price of $93.89. There’s a 62% chance that the put will expire worthless.
On the call side, a $97.00 strike call option is available with a bid of $9.25. If purchased at the current price and sold as a covered call, it could offer a total return of 13.16% if the stock is called away at expiration. The odds of this call expiring worthless are at 48%, potentially providing a yield boost of 9.85% or 71.92% annualized.
The implied volatility for the put is 76% and for the call, it is 78%, with the actual trailing twelve-month volatility calculated at 76% based on recent trading data.
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