New May Options Available for Spotify Investors: Insights
Investors focusing on Spotify Technology SA (Symbol: SPOT) will find new options available today, set to expire on May 30th. At Stock Options Channel, our YieldBoost formula has analyzed the SPOT options chain, highlighting a notable put and call contract.
Put Option Insights
The put contract at a $550.00 strike price currently holds a bid of $45.70. By selling-to-open this put contract, an investor agrees to purchase SPOT shares at $550.00. With the premium collected, the effective cost basis for the shares would drop to $504.30, before broker commissions. For those interested in buying SPOT shares, this could represent a more attractive alternative compared to the current share price of $560.07.
This $550.00 strike price is approximately 2% lower than the current market price, indicating it is out-of-the-money by that margin. The latest analytical data shows a 57% chance that the put contract may expire worthless. At Stock Options Channel, we will continue to monitor these odds and provide updates on our website, along with a chart detailing these changes. If the contract does expire worthless, the premium would yield an 8.31% return on the cash commitment, or an annualized return of 60.66%, which we refer to as the YieldBoost.
Below is a chart illustrating the trailing twelve-month trading history for Spotify Technology SA, with the $550.00 strike position marked in green:
Call Option Insights
On the call side of the options chain, a $565.00 strike price call contract currently has a bid of $44.65. If an investor buys SPOT shares at the current price of $560.07 and sells this call as a “covered call,” they commit to sell the stock at $565.00. Additionally, the premium received would lead to an effective total return of 8.85% if the stock is called away at the May expiration (not including any dividends or broker commissions). However, if SPOT’s price rises significantly, this strategy could limit upside potential, making it crucial to analyze SPOT’s historical performance and business fundamentals. Below is the chart of SPOT’s trailing twelve-month trading history, with the $565.00 strike highlighted in red:
The $565.00 strike is about 1% above the current trading price, indicating it is slightly out-of-the-money. There is a 48% probability, based on current analytical data, that the covered call contract could expire worthless, allowing the investor to retain both their shares and the collected premium. If this occurs, the premium alone would represent a 7.97% increase in return, or an annualized 58.20%, which we term as the YieldBoost.
For further insights, the implied volatility of the put contract is 65%, while the call contract shows an implied volatility of 62%. In comparison, the actual trailing twelve-month volatility, based on the last 251 trading days and the current price of $560.07, stands at 43%. For more options contract ideas, visit StockOptionsChannel.com.
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Additionally check:
- Institutional Holders of PLNR
- GLBZ market cap history
- Coterra Energy MACD
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
