Investors Explore Put Options Strategy for Insmed Inc Shares

Investors interested in purchasing Insmed Inc (Symbol: INSM) shares may want to reassess the current market price of $65.44 per share. One alternative strategy worth considering is selling put options. Specifically, the December put contract with a $50 strike price presents an intriguing opportunity, offering a bid of $4.80 at the time of this writing. Collecting this premium equates to a 9.6% return based on the $50 commitment, translating to a 13.9% annualized return, referred to as the YieldBoost by Stock Options Channel.

Selling a put provides different benefits compared to owning shares. A put seller only acquires shares if the contract is exercised. The counterparty will only exercise at the $50 strike if it is more advantageous than selling at the current market price. If Insmed’s stock declines by 24.1%, the contract may be exercised, resulting in a cost basis of $45.20 per share (subtracting the $4.80 premium from $50). Without this scenario, the only profit for the put seller comes from the premium, generating a 13.9% annualized return.

Below is a chart depicting the trading history of Insmed Inc over the past twelve months, with the current $50 strike price highlighted in green:

The chart and Insmed’s historical volatility offer valuable insights, particularly when paired with fundamental analysis. Evaluating the 13.9% annualized return from selling the December put option at the $50 strike can help gauge its risk-reward ratio. Currently, the trailing twelve-month volatility for Insmed, based on the last 251 trading days and today’s price of $65.44, stands at 89%. For more options strategies and different expiration dates, check the INSM Stock Options page on StockOptionsChannel.com.

During the mid-afternoon trading session on Friday, the put volume for S&P 500 components reached 1.12 million contracts, matching call volume at 1.12 million, resulting in a put-to-call ratio of 0.74. This figure exceeds the long-term median put-to-call ratio of 0.65, suggesting that there are more put buyers in today’s options market than anticipated based on historical data. To discover which options traders are currently trending, visit Stock Options Channel.

Top YieldBoost Puts of the S&P 500 »

Also see:

• MDR shares outstanding history
• AOL Options Chain
• CBK Historical Stock Prices

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