Investors interested in Dollar Tree Inc (DLTR) shares are considering selling January 2027 put options at an $80 strike price, yielding a premium of $4.70. This offers a potential return of 5.9% against the $80 commitment, translating to an annualized return of 4.2%. The current market price for DLTR is $112.73.
The only scenario where investors selling the put option will end up owning shares is if DLTR’s price falls by 29%, making the exercise price of $80 beneficial compared to the market price. The put seller earns income only from the premium collected unless the contract is exercised.
Dollar Tree’s trailing twelve-month volatility stands at 49% based on the last 250 trading days, while the stock’s historical data can assist investors in evaluating the risks associated with this strategy.
