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MaxLinear Inc (Symbol: MXL) has introduced new options contracts with a November 21st expiration. Investors can explore a put contract at a $16.00 strike price, currently bid at $1.70, which effectively lowers the purchase price to $14.30 if sold to open. This represents approximately a 1% discount from the current trading price of $16.12 per share. There’s a 57% chance this put contract could expire worthless, which would yield a potential 10.62% return on the cash commitment.
On the call side, a contract at the $17.00 strike price is available with a current bid of $1.40. By purchasing shares at $16.12 and selling this call as a “covered call,” investors could see a return of 14.14% if the stock is called away by expiration date. However, there is a 52% chance this call could also expire worthless, in which case investors retain their shares and the premium, resulting in an 8.68% extra return. The implied volatility for the put is 81%, and for the call, it is 78%.
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