Investors in PDD Holdings Inc (Symbol: PDD) observed new options trading this week for expiration on October 16, 2023. Significant details include a put contract with a $100 strike price currently bid at $9.20, offering a potential effective acquisition price of $90.80 per share. This represents about a 4% discount to the current trading price of $104.63, with a 65% chance of expiring worthless, leading to a possible 9.20% return on investment.
Additionally, a call contract at the $110 strike price is currently bid at $11.40. If purchased alongside shares at $104.63, the call could yield a 16.03% return if shares are called away. This strike is approximately 5% above the current market price, with a 46% likelihood of expiring worthless, resulting in a potential 10.90% boost in returns. The implied volatility for the put and call contracts stands at 44% and 40%, respectively.
