Investors in Twilio Inc (TWLO) observed new options trading today, specifically for contracts expiring on March 27. A notable put contract at a $109.00 strike price has a current bid of $7.75, allowing sellers to purchase the stock at a reduced cost basis of $101.25, a 1% discount from today’s trading price of $109.83. The odds of this put contract expiring worthless are estimated at 57%, with a potential 7.11% return on cash commitment if it does.
Additionally, a call contract at the $111.00 strike price has a bid of $8.65. If an investor buys shares at the current price and sells this covered call, they could see an 8.94% return if the stock is called away at expiration. This call carries a 46% chance of expiring worthless, offering a 7.88% potential boost to returns if that occurs. Implied volatility for the put is at 65%, while the call stands at 67%, compared to a trailing twelve-month volatility of 57%.
