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Mirum Pharmaceuticals Options Trading Insights

Options trading begins for Mirum Pharmaceuticals, showing potential investing opportunities. With put and call contracts in play, investors may find favorable conditions for stock movements.

Date: 
AI Rating:   7

Options Trading Activity: Investors are now engaging in options trading for Mirum Pharmaceuticals Inc (MIRM), with put and call contracts created for the May 16th expiration. Notably, the put contract at a $45.00 strike price presents a potential attractive alternative for acquiring shares, especially given its 5% discount compared to the current price of $47.54. Investors looking to enter MIRM could consider the reduced cost basis at $44.50 if they choose to sell-to-open this contract.

The calculation of the option's potential value indicates a possibility of expiring worthless, with odds at 63%. If this occurs, the premium collected could yield a 1.11% return, translating to 7.65% annualized. Adopting effective options strategies like these can create attractive opportunities for investors.

Covered Calls: Additionally, a call contract at the $50.00 strike price has been identified. It represents a 5% premium over the current trading price. If investors purchase shares at $47.54 and proceed to sell the call contract as a covered call, they commit to selling at $50.00, achieving an effective total return of 7.28% barring additional commissions. With a probability of the contract expiring worthless at 55%, investors could retain both shares and premium collected, yielding a 2.10% extra return or 14.49% annualized.

Implied and Actual Volatility: The implied volatility for the put and call contracts stands at 54% and 59% respectively, suggesting a market expectation of significant price movement. In contrast, the actual trailing twelve-month volatility is calculated at 50%, indicating more historical stability during trading. This can potentially impact investor sentiment regarding future price movements.

Stocks:  MIRM