Investors in Seagate Technology Holdings PLC (STX) have new options available for trading this week, specifically for a May 15th expiration. A put contract with a $400 strike price has a current bid of $50.00, allowing investors to potentially purchase shares at an effective cost basis of $350.00, anticipating a 1% discount from the current trading price of $405.81. There’s a 59% chance that the put contract may expire worthless, indicating a potential 12.50% return on investment if it does.
On the call side, a contract at the $420 strike price is currently bid at $52.20. If shares are purchased at $405.81 and the call is sold, the investor could achieve a total return of 16.36% if the stock is called away by the expiration. This call contract has a 46% probability of expiring worthless, potentially providing an extra return of 12.86%.
Implied volatility stands at 73% for the put and 77% for the call, while actual trailing twelve-month volatility is calculated at 61%.
