Investors interested in Corcept Therapeutics Inc (CORT), currently trading at $39.61 per share, are exploring alternative strategies to buying the stock, notably selling put options. An August put option at the $25 strike has a bid of $2.60, which offers a potential 10.4% return on the $25 commitment, translating to an annualized rate of 18.7%.
Selling this put contract means investors will only acquire shares if the option is exercised, which would require the stock price to drop by 37%. In such a case, the effective cost basis would be $22.40 per share after accounting for the premium. The current volatility of Corcept’s stock is calculated at 117%, aiding in the assessment of the risk-reward profile for this strategy.
