New Trading Opportunities Emerge for Rapid7 Inc Options
Investors Eye November 21st Options with Promising Premiums
Investors in Rapid7 Inc (Symbol: RPD) are presented with new options trading as of today, targeting a November 21st expiration date. A key factor influencing the price that an option buyer is willing to pay is time value. With a substantial 315 days until expiration, these newly trading contracts may allow sellers of puts or calls to achieve a higher premium compared to options with closer expiration dates. At Stock Options Channel, our YieldBoost formula has identified one put and one call contract of particular interest from the RPD options chain.
The put contract at a $37.00 strike price currently has a bid of $3.20. An investor selling to open this put contract would agree to buy the stock at $37.00 while collecting the premium, effectively lowering the cost basis to $33.80 (before broker commissions). For someone already considering purchasing shares of RPD, this might seem like a better option than paying the current market price of $38.54 per share.
As the $37.00 strike is approximately 4% lower than the stock’s current trading price, there’s a chance the put contract could expire worthless. Current analytical data indicates a 65% likelihood of this occurring. Stock Options Channel will monitor these odds over time, providing updates on their status, which will be available on our website under the contract’s detail page. Should this put contract expire without value, the premium would yield an 8.65% return on the cash commitment, translating to a 10.02% annualized return — a figure we refer to as the YieldBoost.
Below is a chart displaying Rapid7 Inc’s trading history over the trailing twelve months, highlighting the position of the $37.00 strike price:
On the call side of the options chain, there is a call contract at the $45.00 strike price with a current bid of $3.40. If an investor buys shares of RPD stock at the current price of $38.54 and then sells this call contract as a “covered call,” they agree to sell the stock at $45.00. Including the premium, this transaction would result in a potential return of 25.58% if the stock is called away at the November 21st expiration (before broker commissions). However, considerable upside could be missed if RPD shares appreciate significantly, emphasizing the importance of review of historical trading performance and business fundamentals.
A chart illustrating RPD’s trading history, with the $45.00 strike price marked in red, is shown below:
The $45.00 strike represents about a 17% premium over the current stock price, meaning there is a chance this covered call could also end up worthless. In this scenario, the investor would retain both their shares and the collected premium. Current analytical data suggests a 53% likelihood of this outcome. We will continue to track these probabilities and will publish the findings on our website under the contract detail page, alongside the option contract’s trading history. If this covered call expires worthless, the premium would yield an additional return of 8.82%, or 10.22% annualized, categorized as a YieldBoost.
The implied volatility for the put contract is at 44%, while the call contract shows an implied volatility of 45%. In contrast, the actual trailing twelve-month volatility, considering the last 250 trading day closing values and today’s price of $38.54, is calculated at 42%. For additional put and call options contract ideas, visit StockOptionsChannel.com.
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Also see:
- SINV Options Chain
- BRDG shares outstanding history
- Funds Holding UACL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
