Investors in Illumina Inc (Symbol: ILMN) gained access to new options expiring on November 21, with notable contracts identified. A put contract at a $75.00 strike has a current bid of 65 cents, reflecting a potential purchase commitment at that price, which equates to a cost basis of $74.35 after accounting for the premium. This represents a 28% discount to the current trading price of $103.46.
The odds of the put contract expiring worthless are estimated at 89%, presenting a potential return of 0.87% on the cash commitment, or an annualized 3.47%. Conversely, a call contract at the $105.00 strike has a bid of $6.70, offering a total return of 7.96% if the stock is called away by expiration. There’s a 47% chance this call contract could also expire worthless, presenting a potential 6.48% extra return, or 25.96% annualized.
The implied volatility for the put contract is 61% while for the call contract it is 43%, compared to a trailing twelve-month actual volatility of 42% based on the last 250 trading days.
