Exploring Selling Puts as an Investment Strategy for Enovis Corp

Investors eyeing Enovis Corp (Symbol: ENOV) and hesitant to purchase shares at the current market price of $31.58 may find value in the strategy of selling put options. One notable option is the December put with a $25 strike price, currently bid at $1.80. Collecting this premium offers a 7.2% return based on the $25 commitment, translating into an annualized rate of 10.7%. This yield, referred to as the YieldBoost at Stock Options Channel, could enhance returns for strategic investors.

It’s important to recognize that selling a put does not provide the full upside potential of owning shares outright. A put seller only acquires the stock if the contract is exercised, which occurs if it’s advantageous compared to the prevailing market price. Therefore, for the put buyer to profit from exercising the option, Enovis shares would have to fall by at least 20.5%, resulting in a cost basis of $23.20 per share before broker fees (calculated by subtracting the $1.80 premium from the $25 strike). In the absence of this decline, the put seller’s only benefit would be from the premium collected, producing the 10.7% annualized return.

The following chart depicts the trailing twelve months of Enovis Corp’s trading history, with the $25 strike highlighted in green for context:

This chart, combined with the historical volatility of Enovis Corp, serves as a valuable resource. It helps investors assess whether selling the December put at the $25 strike for a 10.7% annualized return justifies the associated risks. Recent calculations indicate that the trailing twelve-month volatility for Enovis Corp, based on the latest 251 trading days alongside today’s price of $31.58, stands at 37%. For additional put option ideas across various expirations, explore the ENOV options page on StockOptionsChannel.com.

During mid-afternoon trading on Thursday, put volume among S&P 500 constituents reached 1.15 million contracts, while call volume was at 1.39 million, yielding a put-to-call ratio of 0.82. This figure is notably higher than the long-term median ratio of 0.65, indicating a surge in put buying activity relative to calls. To see which 15 call and put options traders are currently discussing, check out the latest information.

Top YieldBoost Puts of the S&P 500 »

Also see:

• SBFM shares outstanding history
• Institutional Holders of XRM
• OFS YTD Return

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