Exploring Put Options for Edwards Lifesciences Corp Amid High Market Price

Investors looking to buy shares of Edwards Lifesciences Corp (Symbol: EW) but hesitant about the current market price of $76.07 per share might find selling puts a worthy alternative strategy. A notable option is the January 2027 put contract with a $60 strike price, currently bid at $4.10. Collecting this bid as a premium offers a 6.8% return based on the commitment of $60, translating to a 4% annualized yield, a concept we term YieldBoost.

It’s important to understand that selling a put does not grant access to Edwards Lifesciences’ potential upside like owning shares would. The seller only acquires shares if the contract is exercised, which occurs only if selling at the $60 strike proves more advantageous than recently selling at the market price. Unless the stock declines by 21.2%, leading to the contract’s exercise (thereby establishing a cost basis of $55.90 per share after accounting for the premium), the sole profit for the put seller comes from the collected premium and the 4% annualized rate of return.

Below, a chart illustrates the trailing twelve-month trading history for Edwards Lifesciences Corp, highlighting the $60 strike price in green relative to this history:

This chart, paired with the stock’s historical volatility, can aid investors in determining whether selling the January 2027 put at the $60 strike for a 4% annualized return aligns with risk considerations. The trailing twelve-month volatility for Edwards Lifesciences Corp, calculated using the last 249 trading day’s closing values and the current price of $76.07, stands at 46%. For additional ideas on put option contracts with various expirations, explore the EW stock options page.

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