C3.ai Inc Options Trading: Insights and Opportunities

A fresh report highlights new options for C3.ai Inc investors, indicating strategic opportunities in both put and call contracts that could influence stock pricing dynamics in the coming months.

Date: 11-12-2024

AI Rating: 7

The report discusses new options available for C3.ai Inc (AI) investors, with the March 2025 expiration date providing notable opportunities. Key data points suggest a possible attractive entry point through the put contract at the $32.50 strike price, reflecting a 16% discount to the current share price of $38.48. Selling this put contract represents a commitment to purchase shares at the strike price while collecting a premium that reduces the effective cost basis to $30.03.

This put option carries a 72% probability of expiring worthless, and the premium could yield a return of 7.60%, or 27.75% annualized, which could be appealing for investors looking to minimize their cost basis.

On the call option side, the covered call at the $45.00 strike price also reflects a strategic opportunity. With a premium of $2.80, purchasing shares and selling the call would commit the investor to sell at $45.00. The potential total return of 24.22% highlights a significant upside while also presenting a risk of upside loss should the stock price rise sharply. The odds of this call contract expiring worthless are estimated at 57%, which would also offer an additional 7.28% yield on the investment. This yield represents a compelling option for those who seek to maximize their returns while managing risk.

The implied volatility of the put is noted at 82%, and the call at 80%, compared to an actual trailing twelve month volatility of 62%. These figures indicate considerable market expectations of future volatility for C3.ai's stock, suggesting potential price swings that investors should consider.

Stocks: AI