New Options Trading Strategies Emerge for Five9, Inc. (FIVN)
Investors in Five9, Inc. (Symbol: FIVN) observed fresh options commence trading today, targeting the August 15th expiration date. A notable element affecting an option’s price is its time value. With 87 days remaining until expiration, these new contracts offer sellers of puts or calls the potential to secure higher premiums compared to those with shorter durations. Utilizing our YieldBoost formula, Stock Options Channel has analyzed FIVN’s options chain, identifying a specific put and call contract worth noting.
Put Option Details
The put contract at the $25.00 strike price has a current bid of 75 cents. By selling this put option, an investor commits to buying the stock at $25.00 while also collecting the premium. This arrangement effectively lowers the cost basis of shares to $24.25 (excluding broker commissions). For those interested in acquiring FIVN shares, this might be a more appealing choice than purchasing at the current market price of $27.05 per share.
The $25.00 strike price, representing about an 8% discount from the current market price, indicates a potential risk that the put option could expire worthless. Current data suggests a 67% chance of this occurring. Over time, Stock Options Channel will monitor these odds and publish updates on our website, including a chart detailing this contract’s performance. Should the contract become worthless at expiration, the premium offers a 3.00% return on the cash commitment, translating to a 12.59% annualized return. This is what we refer to as the YieldBoost.
Trading History Visualization
Below is a chart depicting Five9, Inc.’s trading history over the past twelve months, highlighting where the $25.00 strike price fits within that context:
Call Option Insights
Shifting focus to call options, the $27.50 strike price has a current bid of $2.90. If an investor purchases FIVN shares at the current price of $27.05 and then sells this call option as a “covered call,” they obligate themselves to sell the stock at $27.50. This approach provides a total return of 12.38% (excluding dividends, if applicable) if the stock is called away at the August 15th expiration. However, substantial upside is possible if FIVN shares significantly increase in value, making it crucial to analyze both the stock’s trading history and its underlying business fundamentals.
Below is a chart of Five9, Inc.’s trading history for the past twelve months, with the $27.50 strike price highlighted in red:
The $27.50 strike price is approximately 2% above the current trading price, which means it is also out-of-the-money by an equivalent percentage. Thus, there exists a possibility that this covered call could expire worthless, allowing the investor to retain both their shares and the collected premium. Current analyses indicate a 45% chance of this outcome. Stock Options Channel will regularly track these odds, providing updates on the contract’s historical performance as well.
If the covered call expires worthless, the premium would contribute an additional 10.72% to the investor’s returns, equating to a 44.98% annualized yield, which we similarly refer to as the YieldBoost.
The implied volatility for the put option stands at 65%, whereas the call option has an implied volatility of 63%. In comparison, the actual trailing twelve-month volatility, based on the last 250 trading days alongside today’s price of $27.05, is calculated at 57. For additional put and call options strategies worth considering, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
