Investors in Twilio Inc (TWLO) started trading new options for an August 21st expiration today, with 109 days remaining. Notable contracts include a put at the $185.00 strike price, currently bid at $21.80, which could allow an investor to purchase shares at an effective cost basis of $163.20 if sold. This represents an approximate 1% discount to TWLO’s current market price of $186.26.
Additionally, a call contract at the $190.00 strike price is being bid at $20.40. If an investor buys shares at today’s price and sells this call as a covered call, they stand to gain a total return of 12.96% if the stock price hits the strike by expiration. There’s a 46% chance that this call would expire worthless, allowing the investor to retain both shares and premium collected. The implied volatility for the put is 61%, while for the call it stands at 58%.
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