On October 1, 2023, Spotify Technology SA (Ticker: SPOT) launched new options with a December 2028 expiration date. Notably, a put contract at the $550.00 strike price has a bid of $116.95, allowing investors to commit to buying the stock while collecting a premium, reducing their effective purchase cost to $433.05, which reflects a potential 21.26% return on the cash commitment if the option expires worthless, with current odds at 68%.
Additionally, a call contract at the $700.00 strike price has a bid of $119.25. If shares are purchased at the current price of $553.85 and the call is sold, this could yield a total return of 47.92% if exercised, pending a 45% chance of the option expiring worthless, resulting in a potential 21.53% boost in returns.
The implied volatility for both options stands at approximately 46%, while the actual trailing twelve-month volatility is calculated to be 44%.
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