Options Strategies Emerges as Investors Eye Okta (OKTA)

Investors exploring options for Okta (OKTA) should consider the new July 3 contracts. Analysts highlight a put option offering potential buying advantages and a call option providing promising returns if stock prices rise.

Date: 22-05-2025

AI Rating: 6

Evaluating Okta's Options Contracts

Okta Inc (OKTA) is presenting some interesting opportunities for investors with its new July 3 options contracts. The put option at a $123.00 strike price allows investors to purchase shares effectively at $116.30, which could be a wise move as it represents a tempting option for those already interested in the stock. The premium collected from the put contract offers a significant yield boost of 5.45%, or an annualized 47.34%, by potentially expiring worthless given the current odds of 56%.

On the call options side, investing at the current share price and selling a covered call at $125.00 for a premium of $7.10 would allow for a potential return of 6.63% if the stock is called away. Investors should note that if this call contract expires worthless, they will attain a 5.73% yield while maintaining their shares, equating to an annualized return of 49.80%. However, this opportunity could limit upside potential if stock prices rise significantly.

Implied volatilities for both the put (56%) and call (54%) contracts suggest higher market expectations for price movements; however, actual volatility over the trailing twelve months has been lower at 47%. This divergence indicates that investors might look for price action that meets or exceeds the market’s expectations reflected in option premiums.

Potential Impact on Stock Price

While this report does not directly address Okta's financial metrics such as Earnings Per Share (EPS), Revenue Growth, Net Income, or Profit Margins, the current options environment suggests that investor sentiment remains cautiously optimistic around Okta’s stock. Investors following this trend will want to look at the company’s financial performance metrics before deciding whether to engage with these options strategies.

Stocks: OKTA