New Options Activity Highlights Fortinet's Investment Potential

Investors are eyeing Fortinet Inc as new options become available, presenting potential investment strategies in the current market environment. The April 17th contracts might offer appealing premiums for both put and call options.

Date: 15-01-2025

AI Rating: 7

**Investors React to Fortinet's New Options Contracts**

The report highlights recent options activity for Fortinet Inc (Symbol: FTNT). Two specific contracts of interest have emerged: a put contract with a strike price of $92.50 and a call contract with a strike price of $97.50. These new options could present potential strategies for investors looking to capitalize on market movements.

The put contract at a $92.50 strike price has a current bid of $6.05. If an investor opts to sell-to-open this put contract, they are effectively committing to purchase shares at $92.50, while also collecting the premium. This could reduce the effective cost of acquiring the stock to $86.45, making it an attractive alternative compared to today's share price of $93.80. The put option represents a potential yield boost — if it expires worthless, the return is projected to be 6.54% on the cash commitment, equating to an impressive 25.96% annualized return.

Meanwhile, the call contract at the $97.50 strike price has a bid of $5.85. If purchased with shares at the current price of $93.80 and subsequently sold as a covered call, the total return on investment could be 10.18% if the shares are called away at expiration. Additionally, if the contract were to expire worthless, the investor could benefit from retaining their shares and the premium, leading to an additional 6.24% return or a 24.75% annualized rate.

The volatility metrics are also noteworthy, with the implied volatility of the puts at 39% and the calls at 40%, compared to an actual trailing volatility of 37%. Due to the options' out-of-the-money status and corresponding probabilities of expiring worthless (58% for the put and 52% for the call), investors might find these strategies appealing for either income generation or capital gains.

Stocks: FTNT