Investors Explore Selling Puts on Axcelis Technologies Inc.

For investors eyeing a purchase of Axcelis Technologies Inc (Symbol: ACLS) but hesitant about the current market price of $59.73 per share, selling puts presents a potential alternative. One noteworthy option is the December put with a $45 strike, currently bid at $4.20. This bid translates to a 9.3% return based on a $45 commitment, equating to an annualized return rate of 11.9%—a concept termed YieldBoost at Stock Options Channel.

It’s important to recognize that selling a put does not give investors the same exposure to ACLS’s upside that owning shares provides. Typically, the put seller acquires shares only if the contract is exercised. For the put option to be exercised profitably for the counterparty, ACLS shares must decline below the strike price. Specifically, unless shares fall by 24.8% and trigger the option (leading to a cost basis of $40.80 per share, after accounting for the $4.20 premium), the put sellers’ only benefit would stem from the collected premium, yielding the aforementioned 11.9% annualized return.

In the chart below, we illustrate the trailing twelve-month trading history of Axcelis Technologies Inc, with the $45 strike price highlighted in green for reference:

This chart, combined with the stock’s historical volatility, can serve as a valuable resource for evaluating whether selling the December put option at the $45 strike for an 11.9% annualized return offers a reasonable reward for the associated risks. Current calculations show Axcelis Technologies Inc has a trailing twelve-month volatility of 50%, based on the last 250 closing values and today’s price of $59.73. Investors seeking additional put option strategies with varying expiration dates can visit the ACLS Stock Options page at StockOptionsChannel.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.