Investors Eye Rigetti Computing: A Closer Look at Selling Puts

Investors interested in Rigetti Computing Inc (Symbol: RGTI) may find an alternative to purchasing shares at the current market price of $9.33 per share by considering the strategy of selling puts. One notable contract is the January 2027 put at the $3 strike, which has a bid price of 73 cents at this time. By collecting this premium, an investor could achieve a 24.3% return based on the $3 commitment, or a 14.1% annualized rate of return.

It’s important to note that selling a put does not give an investor access to RGTI’s upside potential as owning shares would. The put seller only owns shares if the contract is exercised. The buyer of the put contract will only exercise it at the $3 strike price if this action yields a better outcome than selling at the prevailing market price. Unless Rigetti Computing’s shares decline by 67.8% and the contract gets exercised—resulting in a cost basis of $2.27 per share after factoring in the premium—the only benefit for the put seller is the premium, which translates to a 14.1% annualized return.

The chart below illustrates Rigetti Computing Inc’s trailing twelve-month trading history, highlighting the position of the $3 strike in green:

This chart, along with the historical volatility of Rigetti’s stock, can assist investors in determining whether selling the January 2027 put at the $3 strike for the 14.1% annualized return is a worthwhile risk-reward proposition. The trailing twelve-month volatility for Rigetti Computing Inc, based on the last 250 trading day closing prices and the current price of $9.33, is calculated at 172%. For additional put option ideas across various expiration dates, consider visiting the RGTI Stock Options page.

Top YieldBoost Puts of the S&P 500 »

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