Astera Labs Stock Puts Offer 9.2% Annualized Return

Astera Labs Inc (ALAB) provides a unique strategy for investors, offering the chance to sell puts for a 9.2% annualized return. Investors may find this alternative strategy attractive given its current market setup.

Date: 06-03-2025

AI Rating: 6

Puts and Their Returns
Astera Labs Inc (Symbol: ALAB) is currently priced at $64.98/share, making some investors cautious about direct stock purchases. Instead, they may look to alternative strategies such as selling put options. Specifically, the January 2027 put at a $32.50 strike offers a bid of $5.60, equating to a potential 17.2% return relative to the commitment and a 9.2% annualized return.

While selling a put does not provide upside potential like owning the shares, it presents a modest return if ALAB's shares remain stable or appreciate. Investors would only gain shares if the stock declines significantly, making this strategy riskier if the company's stock performs poorly. Thus, assessing the volatility could guide investor decisions. The trailing twelve months’ volatility is calculated at 89%, indicating significant fluctuations in stock prices.

Additionally, today's market reveals 999,983 put contracts, comparable to call volumes, resulting in a put:call ratio of 0.71—above the historical median of 0.65, suggesting increased put buying relative to calls in the current trading environment. This trend could indicate investor caution, reflecting a preference for protective positions amid market uncertainties.

Stocks: ALAB