Exploring Put Options for MannKind Corp: A Strategic Insight
Investors considering a purchase of MannKind Corp (Symbol: MNKD) at the current market price of $4.96 per share might find an alternative approach through selling put options. One notable option is the January 2027 put contract at the $3 strike price, which has a bid of 40 cents as of this writing. Accepting this bid would yield a return of 13.3% on the $3 commitment, translating to a 7.2% annualized return—a metric we refer to as the YieldBoost at Stock Options Channel.
Understanding the Risks of Selling Put Options
It is important to note that selling a put option does not provide the same upside potential as owning shares. An investor becomes the owner of shares only when the contract is exercised. The seller on the other side of the contract would only benefit from exercising the option at the $3 strike price if that decision yields a better financial outcome than the market price. Unless MannKind Corp’s stock experiences a significant decline—specifically, a 40% drop leading to the $3 strike price being exercised—the primary benefit for the put seller is the collection of the premium, securing that 7.2% annualized return.
Chart Analysis: MNKD’s Trailing Twelve Month Performance
Below is a chart showcasing the trailing twelve-month trading history for MannKind Corp, with the $3 strike price highlighted in green for easy reference:
The chart and MannKind’s historical volatility serve as valuable tools when combined with fundamental analysis, helping investors assess whether selling the January 2027 put at the $3 strike is a sound trade-off for the risks involved. Based on our calculations, the trailing twelve-month volatility for MannKind Corp—factoring in the last 250 trading days along with the current price of $4.96—stands at 41%. For additional put option ideas across various expirations, please visit the MNKD Stock Options page at StockOptionsChannel.com.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
