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Duolingo Inc (Symbol: DUOL) has launched new options trading for December 19th expiration, with 98 days until expiration. A $310.00 strike put contract has a current bid of $41.00, allowing investors to potentially purchase shares at an effective cost basis of $269.00, a 15% discount compared to the current trading price of $315.35. The odds of the contract expiring worthless are estimated at 60%.
On the call side, a $320.00 strike contract is bid at $43.30. If investors purchase shares at $315.35 and sell this covered call, they could see a total return of 15.21% if the contract is executed. The covered call has a 44% chance of expiring worthless, potentially allowing investors to retain both the shares and the premium collected.
The implied volatility for the put and call contracts is around 73% and 72%, respectively, while Duolingo’s actual trailing twelve-month volatility stands at 60%.
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