New Opportunities Unveiled
Today marked the inception of trading for the January 2025 options on Avidity Biosciences Inc (Symbol: RNA), ushering in a fresh wave of potential for investors. With 284 days left until expiration, these new contracts hold the promise of offering sellers of puts or calls a chance to secure a higher premium compared to nearer expiration contracts. Amidst the flurry of activity, one put and one call contract emerged as particularly intriguing, as identified by Stock Options Channel’s YieldBoost formula.
The Put Contract Perspective
Among the notable contracts is the put option at the $22.00 strike price, currently fetching a bid of $2.50. Opting to sell-to-open this put contract would entail committing to buy the stock at $22.00 – a move that would not only grant ownership at a discounted price but also see the investor pocket the premium, effectively reducing the cost basis to $19.50 per share.
Charts, Graphs, and Insights
An analysis of the data reveals a 72% chance that the put contract would expire worthless, offering a 11.36% return on the cash commitment and a 14.60% annualized yield. Stock Options Channel stands ready to track these odds over time, providing investors with valuable insights along the way. A visual representation of the stock’s trading history and the strategic $22.00 strike are depicted in a chart, putting the information into a clearer perspective.
Shifting focus to the calls side, the $30.00 strike call contract presents an alternate opportunity. With a current bid of $3.10, investors eyeing this option can engage in a “covered call” strategy, committing to sell the stock at $30.00 while reaping the premium. This move could result in a total return of 32.67% at expiration, barring any dividends, providing a closer look into the potential outcomes.
The chart illustrating the stock’s trailing twelve-month performance, coupled with the $30.00 strike call, brings forth valuable insights for investors considering this route. It underscores the 20% premium the call carries relative to the current trading price, outlining both the possibilities and challenges that lie ahead.
Analyzing Implied Volatility
Implied volatility levels for the put and call contracts stand at 83% and 79%, respectively, offering a glimpse into market expectations. Meanwhile, the actual trailing twelve-month volatility, calculated at 75%, provides a real-world perspective based on historical trading data.
For investors seeking further options contract ideas, StockOptionsChannel.com serves as a valuable resource, offering a plethora of opportunities for exploration and analysis.
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Additional Insights:
YTD Return on Dow
KLIC YTD Return
APA Technical Analysis
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
