Wix.com Ltd. (Symbol: WIX) has introduced new options expiring on June 18, 2023, offering potential investment opportunities. A notable put contract at a strike price of $87.50 has a current bid of $6.40, allowing an investor to purchase shares at an effective cost basis of $81.10, compared to the current trading price of $87.96. This put option carries a 58% probability of expiring worthless, which could yield a 7.31% return on the cash commitment, or 33.37% annualized.
On the call side, a contract with a $90.00 strike price is currently bid at $6.00. If an investor sells this as a covered call after purchasing shares at $87.96, they could realize a total return of 9.14% upon expiration. This contract has a 46% chance of expiring worthless, potentially generating a 6.82% additional return or 31.12% annualized.
Implied volatility for the put and call contracts is 68% and 67%, respectively, while the actual trailing twelve-month volatility is calculated at 57%.
