New Options Available for Ultragenyx Pharmaceutical: What Investors Should Know
Investors monitoring Ultragenyx Pharmaceutical Inc (Symbol: RARE) found new options listed for the March 21st expiration this week. Stock Options Channel identified one notable put and one call contract that could attract attention.
Attractive Put Option for Investors
The put contract at a $35.00 strike price currently has a bid of 65 cents. By selling-to-open this put contract, an investor agrees to purchase the stock at $35.00, while also collecting the premium. This would effectively lower the cost basis of the shares to $34.35 (excluding broker commissions). For those interested in buying RARE shares, this option presents a potentially appealing approach compared to the current market price of $40.44 per share.
The $35.00 strike price provides a roughly 13% discount to the stock’s current trading price, which means there is a chance that the put contract may expire worthless. Current analytical data indicates a 74% probability of this outcome. Stock Options Channel will monitor these odds over time, publishing updates on our website’s contract detail page. If the contract does expire worthless, the premium would yield a 1.86% return on the cash commitment, or 10.77% annualized—a figure we refer to as YieldBoost.
Analyzing the Call Option Perspective
On the calls side, the contract with a $50.00 strike price has a current bid of 55 cents. Investors who decide to buy RARE shares at the current $40.44 price and simultaneously sell-to-open this covered call would be agreeing to sell their shares at $50.00. Including the premium, this transaction could yield a total return of 25.00% at the March 21st expiration date (before broker fees). However, if RARE’s stock price rises significantly, potential gains could be capped, making it important to review the company’s historical trading data and fundamentals. A chart illustrating the trailing twelve-month trading history highlights the $50.00 strike price in red:
Potential Outcomes for Covered Call Investors
Given that the $50.00 strike price is a 24% premium to the current trading price, it’s possible for this covered call contract to expire worthless as well. If that happens, investors could retain their shares and the premium collected. Current data suggests a 65% chance of this scenario occurring. Stock Options Channel will track these odds over time, featuring updates and visual graphs on our website. Should this covered call contract expire worthless, the premium would result in a 1.36% additional return for the investor, or an annualized 7.88%, which we also refer to as YieldBoost.
Implied volatility stands at 86% for the put contract and 82% for the call option. In contrast, we calculate the trailing twelve-month volatility, based on the last 251 trading days and the current stock price of $40.44, to be 41%. For additional ideas on various put and call options contracts, feel free to explore StockOptionsChannel.com.
Explore Top YieldBoost Calls of the S&P 500 »
Additional Resources:
- Top Dividend Stocks YTD
- BTX Price Target
- BIOT Market Capitalization History
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.