Exploring Put Option Strategies for AutoZone Investors

Investors eyeing AutoZone, Inc. (Symbol: AZO) shares at the current market price of $3608.85 may consider an alternative strategy: selling put options. Specifically, the March 2026 put option with a $3000 strike price presents an intriguing opportunity, offering a bid of $95.00. This premium translates to a 3.2% return based on the $3000 commitment, which annualizes to a rate of 3.5%.

It’s important to note that selling a put does not provide the same upside potential as owning shares. A put seller only acquires the shares if the contract is exercised. The contract will only be advantageous for the buyer if exercising it at the $3000 strike price exceeds the current market price. In this instance, if AutoZone’s stock price falls by 16.9% and the contract is exercised, the seller’s effective cost basis will be $2905.00 per share after accounting for the $95.00 premium received. Therefore, the primary benefit for the put seller comes from the collected premium and the corresponding 3.5% annualized rate of return.

Below is a chart outlining the trailing twelve months of trading history for AutoZone, Inc., highlighting the position of the $3000 strike price against this history:

The chart displayed and AutoZone’s historical volatility provide valuable insights when considering whether the March 2026 put option at the $3000 strike price, with a 3.5% annualized return, offers an acceptable risk-reward ratio. Based on calculations from the last 249 trading days, including the current price of $3608.85, AutoZone’s trailing twelve-month volatility stands at 21%. For more ideas on put options with various expirations, visit the AZO Stock Options page.

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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.