Biogen Options Trading Insights: Attractive Strategies Discussed

Investors are exploring new options strategies for Biogen Inc, with trading insights on put and call contracts suggesting potential returns and strategies amidst current stock pricing dynamics.

Date: 27-11-2024

AI Rating: 6

The report discusses new options trading for Biogen Inc (BIIB), with highlights on both put and call contracts that could impact investor strategies. The analysis reveals that the current trading price for BIIB is $159.34.

The put contract at the $155.00 strike price suggests a potential purchase alternative for investors. With a bid of 45 cents, selling-to-open this contract would allow investors to commit to buying stock at $155.00 — effectively lowering their cost basis to $154.55 before broker commissions.

This represents a discount of about 3% compared to the current stock price, indicating the option is out-of-the-money by that percentage. There’s a 64% chance that this contract will expire worthless, providing a premium return of 0.29% on the cash commitment, or an annualized 2.41%. The call contract, on the other hand, has a $165.00 strike price with a bid of 70 cents. Selling this call after purchasing the stock at the current price could yield a total return of 3.99%, though it carries a risk of having potential upside foregone if the stock rises significantly.

With a 59% chance of expiration without being exercised, the covered call offers an annualized return of 3.64%. Both options feature an implied volatility of approximately 32%, while the trailing twelve-month volatility stands at 26%. Investors are presented with strategic alternatives, but caution should be exercised due to the inherent risks in options trading.

Stocks: BIIB