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APLS Options Insight: New Opportunities and Market Trends

Investors eye Apellis Pharmaceuticals Inc (APLS) as new options arise. The June 20 expiration offers enticing call and put contracts, reflecting potential earnings scenarios. Short-term positions could benefit from these calculated risks.

Date: 
AI Rating:   7
Options Contracts Overview
New options for Apellis Pharmaceuticals Inc (APLS), set to expire on June 20, are attracting investor interest. The available put and call contracts at the $18 and $19 strike prices, respectively, provide alternative strategies for both conservative and aggressive investors.

Put Contract Insights
The put contract at the $18.00 strike price presents a current bid of $1.75. Selling this contract obligates the investor to buy shares at $18.00, effectively lowering their cost basis to $16.25 after factoring in the premium. This approach could be beneficial in case investors are still interested in acquiring APLS shares, providing a potential discount of approximately 3% relative to the current trading price of $18.53. With a 61% probability that this put contract will expire worthless, this could yield a 9.72% return on the cash requirement, or an annualized return of about 59.14%. This is enticing for investors looking for ways to potentially own the stock at a more favorable price.

Call Contract Analysis
The $19.00 strike call option, with a current bid of $1.90, encourages a buy-write strategy. Purchasing APLS shares at $18.53 and selling the covered call locks in a potential combined return of 12.79% if exercised at expiration. Yet, given that this strike price signifies a 3% premium over the current price, there's a 46% chance the call could expire worthless, allowing investors to retain both their shares and premium. Should that occur, the additional premium results in a potential 10.25% upside return, or an impressive annualized rate of 62.38%.

Implied Volatility Context
Current implied volatilities of 78% and 75% for puts and calls respectively imply significant market expectations regarding price fluctuations. In contrast, actual trailing volatility stands at 56%, suggesting that market participants expect greater uncertainty than historical performance justifies.

The dynamics within APLS's options market reflect strategic points to consider for short-term earnings gain or risk assessment for investors in the pharmaceutical sector. Understanding these contracts coupled with the anticipated price movement could influence trading decisions heading into Q2.
Stocks:  APLS