On December 18th, Welltower Inc (Symbol: WELL) will introduce new options contracts, allowing investors to navigate potential investment opportunities. The put contract at a $210 strike price has a current bid of $13.70, presenting a chance to purchase shares at an effective cost basis of $196.30 after accounting for the premium, given the current stock price of $212.07. This strike price represents a 1% discount, but there’s a 59% chance it could expire worthless, resulting in a potential return of 6.52% on the cash commitment, or 9.68% annualized.
In addition, a call contract at the $220 strike price is available with a bid of $13.50. If investors buy shares at $212.07 and sell this covered call, they could see a total return of 10.11% if the shares are called away at expiration. However, this strike price is about 4% above the current trading price. Analytical data shows a 50% chance this contract could expire worthless, potentially providing a 6.37% additional return or 9.44% annualized.
The implied volatility for the put contract is 27%, while the call contract sits at 25%, with actual trailing twelve-month volatility calculated at 20%. Investors interested in Welltower’s stock options should consider these new contracts as part of their strategy.
