Smart Put Selling Strategy: Exploring Sweetgreen Inc (SG) Options

Alternative Approach to Investing in Sweetgreen’s Stock

Investors interested in Sweetgreen Inc (Symbol: SG) stock, currently priced at $33.40 per share, may want to consider selling put options as an alternative strategy. One noteworthy option is the January 2027 put with a $20 strike price, which has a bid of $4.10 at the moment. This premium offers a 20.5% return on the $20 commitment, translating to a 10.2% annualized rate of return—referred to as the YieldBoost by analysts.

Understanding Put Selling Dynamics

Engaging in put selling does not provide investors the same benefits as owning the stock would. The put seller will only acquire shares if the option is exercised, which occurs if the shares decline significantly. For the contract to be exercised at the $20 strike, Sweetgreen Inc’s stock would need to fall by 40.5%. In this case, the effective cost per share would drop to $15.90 after factoring in the $4.10 premium. The primary gain for the put seller remains the premium collected, representing the 10.2% annualized return.

Below is a chart showcasing the past twelve months of trading history for Sweetgreen Inc, with the location of the $20 strike price clearly marked:

Evaluating Risk Versus Reward with Historical Volatility

The above chart, along with an examination of Sweetgreen’s historical volatility, can aid in assessing whether selling the January 2027 put at the $20 strike price offers adequate compensation for the associated risks. The trailing twelve-month volatility for Sweetgreen Inc, based on the last 250 trading days’ closing values and the current price of $33.40, stands at 81%. To explore additional put options with varying expiration dates, visit the SG Stock Options page on StockOptionsChannel.com.

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