Investors in LivaNova PLC (NASDAQ: LIVN) gained access to new options contracts this week, expiring on July 17, 2024, offering potential opportunities for put and call sellers due to the 165-day expiration period. A notable put contract at the $62.50 strike price has a current bid of $3.90, effectively reducing the cost basis to $58.60 if executed, representing a 12.4% discount from the current trading price of $66.97. There is a 65% chance that the put contract will expire worthless, potentially yielding a 6.24% return on cash commitment.
On the call side, a $70.00 strike call contract has a bid of $5.50. If investors buy shares at $66.97 and sell this call as a covered call, they could see a total return of 12.74% by expiration, with a 49% possibility of it expiring worthless, allowing them to keep both shares and premium. The implied volatility for both contracts is around 46%, with LivaNova’s actual trailing volatility calculated at 45%.
