Investors Weigh Alternative Strategies for Doximity Inc Stock

For investors considering a purchase of Doximity Inc (Symbol: DOCS) stock at the market price of $68.14 per share, selling puts may provide an attractive alternative strategy. Specifically, the January 2027 put option with a $47.50 strike price currently bids at $7.50. Selling this put could yield a 15.8% return based on the $47.50 commitment, or an annualized rate of return of 8.5%—referred to as YieldBoost by Stock Options Channel.

Understanding the Risks and Returns

When selling a put, investors do not access Doximity’s potential upside as they would through owning shares. The put seller only acquires shares if the contract is exercised, which occurs under specific circumstances. For instance, the contract would be exercised only if the market price falls below $47.50, offering a better outcome than selling at current market values. If Doximity’s shares decline 30.6%, resulting in an effective cost basis of $40.00 per share (after accounting for the premium), the potential upside for the put seller remains limited to the collected premium, yielding an annualized return of 8.5%.

Chart Analysis of Doximity Stock

Below is a chart illustrating the trailing twelve-month trading history for Doximity Inc, highlighting the position of the $47.50 strike price:

This chart, along with Doximity’s historical volatility, can aid in evaluating whether selling the January 2027 put at the $47.50 strike price for an 8.5% annualized return is an adequate reward for the risks involved. The trailing twelve-month volatility for Doximity, encompassing the last 250 trading day closing values alongside today’s price of $68.14, is calculated at 67%. Traders can explore various put option contract ideas with different expirations on StockOptionsChannel.com’s DOCS stock options page.

Market Trends and Trading Volume

In mid-afternoon trading on Thursday, the put volume for S&P 500 components reached 999,983 contracts, with call volume matching this number, resulting in a put:call ratio of 0.71. This figure exceeds the long-term median put:call ratio of 0.65, indicating a higher than expected interest in put buying activity today among options traders.

For insights into which call and put options traders are discussing currently, click here.

Top YieldBoost Puts of the S&P 500 »

Further Readings:

• Institutional Holders of DES
• ABGI market cap history
• Institutional Holders of IBTA

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