Evaluating Put Strategies for Aptiv PLC Amid Current Market Prices

Investors eyeing a purchase of Aptiv PLC (Symbol: APTV) may find themselves hesitant to pay the current market price of $62.04 per share. A potentially advantageous alternative strategy is selling puts. Notably, the January 2027 put option at the $47.50 strike, with a bid of $4.20 as of this writing, stands out. By collecting this bid, an investor would secure an 8.8% return against the commitment of $47.50, translating to an annualized rate of return of 4.8%, a metric referred to as YieldBoost at Stock Options Channel.

It is important to note that selling a put does not grant an investor access to Aptiv’s potential upside. Instead, the seller only ends up owning shares if the contract is exercised. The counterparty would benefit from exercising the option only if they achieve a better outcome than selling at the market price. If Aptiv’s shares decline by 23.5% and the contract is exercised, the investor’s effective cost basis would be $43.30 per share (after deducting the $4.20 premium from the $47.50 strike price, excluding broker commissions). Beyond this scenario, the only advantage for the put seller is the premium income, which offers the 4.8% annualized rate of return.

The following chart illustrates Aptiv PLC’s trailing twelve-month trading history, indicating the $47.50 strike relative to its previous performance:

This chart, coupled with Aptiv PLC’s historical volatility, can be essential for assessing whether selling the January 2027 put at the $47.50 strike for a 4.8% annualized return represents sufficient compensation for the associated risks. The company’s trailing twelve-month volatility, based on the last 250 closing values and the current price of $62.04, is calculated at 38%. For additional put option contract ideas across various expirations, the APTV Stock Options page on StockOptionsChannel.com provides more details.

During midday trading on Friday, S&P 500 components showed a put volume of 1.33 million contracts, matched by a call volume of 1.33 million, resulting in a put-to-call ratio of 0.70—a figure that exceeds the long-term median ratio of 0.65. This suggests an increased number of put buyers compared to what is typically expected based on the number of call buyers. To discover which 15 options traders are generating discussion today, further insights can be found online.

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Also see:

• Selling Calls For Income
• PFES Options Chain
• GE HealthCare Technologies YTD Return

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