BioMarin Options Trading Signals Potential Stock Moves

A recent report outlines new options trading for BioMarin Pharmaceutical Inc, which may significantly influence stock prices as investors consider both put and call contracts for February 2025 expirations.

Date: 23-12-2024

AI Rating: 7

The report provides insightful information regarding options trading for BioMarin Pharmaceutical Inc (BMRN), which is pertinent for investors looking to gauge potential stock price movements. Investors can engage in a put option at a $57.50 strike price, offering an approximate 12% discount from the current trading price of $65.30. This creates an opportunity for investors interested in acquiring shares at a lower cost basis of $57.45.

If the put contract expires worthless, which current odds estimate at 81%, the premium collected represents a yield of 0.09% on the cash commitment for that period, leading to an annualized yield of 0.53%. For investors, this option could signal a strategy to invest in BMRN stock at a favorable price point.

On the calls side, the report discusses a call option at a $67.50 strike price, representing a 3% premium compared to the current price. Should investors decide to utilize a covered call, there exists a total return potential of 4.44% upon expiration in February 2025, excluding dividends. However, if the call contract also expires worthless (estimated odds of 55%), the investor would benefit from keeping both their shares and the collected premium, resulting in an extra return boost of 1.07% or an annualized yield of 6.52%.

The volatility metrics provided, such as an implied volatility of 40% for the put option and 33% for the call option, alongside a trailing twelve-month volatility of 32%, offer a risk assessment for potential investors. The options market generally reflects investors' sentiments about the underlying stock's price direction, instigating further analyses on both technical and fundamental fronts before making investment decisions.

Stocks: BMRN