C3.ai Options Trading: Insights for Investors

C3.ai Inc (AI) sees new options contracts for December 19, presenting opportunities for investors. Selling puts and calls may yield attractive returns with premiums that reflect current stock dynamics.

Date: 28-05-2025

AI Rating: 7

Options Trading Dynamics
As C3.ai Inc (AI) enters new options trading with contracts expiring on December 19, it creates opportunities for investors to enhance their positions through strategic options selling. The current puts at a $22.50 strike price, coupled with bids around $1.74, provide favorable entry points with adds to the appeal of purchasing shares at a lower effective cost of $20.76. The market's implied odds of the put options expiring worthless stand at a substantial 67%, granting the potential for a 7.73% return on cash commitment, or 13.77% on an annualized basis.

The call contracts at a $27.50 strike indicate a promising upside with current bids at $2.14. Selling a covered call here could yield a remarkable total return of 26.56%, should AI surpass the $27.50 threshold by expiration. However, the investors should remain cautious of missing out on greater price appreciation beyond this point.

Implied vs. Actual Volatility
Current implied volatilities of 67% for the put and 69% for the call options appear elevated compared to the actual trailing twelve-month volatility at 62%. Such differences can impact options pricing and strategy considerations; thus monitoring these parameters should remain a priority for investors aiming to maximize their yield from these trades.

Stocks: AI