Exploring Put Options for Catalent Inc.: A Possible Investment Strategy

For investors considering Catalent Inc. (Symbol: CTLT) but hesitant about the current share price of $59.14, selling puts could be a viable alternative strategy. One notable option to consider is the June 2025 put at a $55 strike price, which remains at a bid of 50 cents. By selling this put, the investor can collect the premium, yielding a 0.9% return on the committed $55, or an annualized rate of 1.5%, known in the market as YieldBoost.

It’s important to understand that selling a put does not offer the same upside potential as owning shares. The put seller will only acquire the shares if the option is exercised, at which point it would be beneficial only if exercising results in a better outcome than selling at the current market rate. For this contract to be exercised, Catalent Inc’s share price must decline by 7%; otherwise, the seller merely profits from the premium, which translates to a modest 1.5% annualized return, after accounting for the contract’s specifics.

Below is a chart showing the past twelve months of trading history for Catalent Inc., with the $55 strike price highlighted in green:

This chart, paired with the stock’s historical volatility, can aid in evaluating whether selling the June 2025 put at the $55 strike—yielding an annualized return of 1.5%—provides an acceptable reward for the associated risks. As of now, Catalent Inc. shows a trailing twelve-month volatility of 26%, calculated from the last 250 trading days and the current price of $59.14. Investors interested in alternative put options across various expirations can check the CTLT Stock Options page on 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.