New BioMarin Options Alert: Explore Calls and Puts for October Expiration
Investors in BioMarin Pharmaceutical Inc (Symbol: BMRN) have new options available this week, specifically expiring on October 17th. With 226 days until expiration, these contracts may present an opportunity for options sellers. Sellers could achieve higher premiums compared to options with nearer expiration dates.
At Stock Options Channel, our YieldBoost formula examined the BMRN options chain and highlighted one put contract and one call contract that stand out. The put contract at the $70.00 strike price currently has a bid of $4.30. If an investor sells-to-open this put contract, they would effectively commit to buying shares at $70.00 while collecting the premium. This arrangement lowers the cost basis to $65.70 (excluding broker commissions), which could be advantageous for investors looking to purchase BMRN shares instead of paying the current market price of $70.64 per share.
This $70.00 strike price offers approximately a 1% discount to the current trading price, indicating it is slightly out-of-the-money. There is a 61% chance, according to analytical data, that this put contract may expire worthless. To monitor this probability, Stock Options Channel will track the odds over time and display them on our website’s contract detail page. Should the put expire worthless, the premium would yield a 6.14% return on cash commitment, or 9.92% annualized—what we refer to as the YieldBoost.
Below is a chart showing the trailing twelve-month trading history for BioMarin Pharmaceutical Inc, with the $70.00 strike highlighted in green:
On the calls side, the $75.00 strike call contract is currently bidding at $5.20. An investor purchasing shares of BMRN at $70.64 and selling-to-open this covered call would be agreeing to sell their shares at $75.00. This approach would result in a total return of 13.53% if the stock is called away at expiration (excluding possible dividends and broker commissions). However, significant upside might be lost if BMRN shares appreciate substantially, highlighting the importance of analyzing the company’s trailing twelve-month trading data and business fundamentals. Below is the chart reflecting BMRN’s trading history, with the $75.00 strike marked in red:
The $75.00 strike represents about a 6% premium over the current trading price of the stock, indicating it is also out-of-the-money by that percentage. The chance of the covered call contract expiring worthless stands at 49%. Tracking these odds is a service that Stock Options Channel provides, with ongoing updates on our contract detail page. Should the covered call expire worthless, the premium would equate to a 7.36% boost in returns, or 11.89% annualized, also a measure we consider a YieldBoost.
The implied volatility for the put contract is 33%, while the call contract’s implied volatility is slightly higher at 34%. Analyzing the trailing twelve-month volatility, which includes the last 250 trading days and the current price of $70.64, yields a figure of 33%. For additional options contract ideas, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
also see:
- Media Dividend Stock List
- FHLT market cap history
- PAC Price Target
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
