Agilon Health (AGL): Consider Selling Puts to Enhance Returns

Investors eyeing Agilon Health Inc (Symbol: AGL) stock, currently priced at $5.36 per share, may want to explore alternative strategies instead of purchasing shares directly. Selling put options is one such strategy, particularly the January 2027 put at the $3.50 strike, which is bidding at 85 cents at the time of this writing. Collecting this premium translates into a 24.3% return on the $3.50 obligation, equating to a 13.8% annualized rate of return, a concept referred to as YieldBoost by Stock Options Channel.

While selling a put option does not grant investors the potential upside of holding shares, it does provide a way to generate income. A put seller typically gains shares only if the option is exercised, which occurs if the market price falls below the agreed strike price. For the investor to benefit from exercising the $3.50 strike, the exercise must yield a more favorable outcome than selling shares at the current market price.

Unless Agilon Health’s share price declines by 34.6%, resulting in the contract being exercised, the put seller’s only reward comes from the premium collected, effectively rendering a 13.8% annualized rate of return on their commitment.

Below is a chart depicting the trailing twelve-month trading history for Agilon Health Inc, highlighting the $3.50 strike position:

This chart, along with Agilon Health’s historical volatility, serves as a useful resource in conjunction with fundamental analysis. Evaluating whether selling the January 2027 put at the $3.50 strike for a 13.8% annualized return is a worthwhile risk-reward proposition is crucial. The trailing twelve-month volatility for Agilon Health, calculated using the last 251 trading days’ closing values and the current price of $5.36, stands at 96%. For additional put option ideas across various expirations, visit the AGL Stock Options page at StockOptionsChannel.com.

In mid-afternoon trading on Friday, the put volume among S&P 500 components hit 1.12 million contracts, matching call volume at 1.12 million, resulting in a put-to-call ratio of 0.74. This figure is above the long-term median put-to-call ratio of 0.65. This indicates an unexpectedly high level of put buyers present in today’s options trading relative to call buyers.

For further insights into trading activity, explore which 15 call and put options traders are currently active today.

Top YieldBoost Puts of the S&P 500 »

Also see:

• Top Ten Hedge Funds Holding FYT
• ECNS shares outstanding history
• Top Ten Hedge Funds Holding IYF

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.