Fortive Corp Options Provide Attractive Opportunities

Fortive Corp's stock options offer potential benefits, with options expiration premium strategies available. Investors may find attractive entry points through put and call contracts as the stock trades around $80.52.

Date: 22-01-2025

AI Rating: 7

Options Market Activity: The report highlights new options available for Fortive Corp (FTV), specifically regarding the September 19th expiration. The put and call contracts at $70.00 and $85.00 strike prices, respectively, provide investors with strategic opportunities.

Put Contract Insights: The put contract at the $70.00 strike price is currently bid at 70 cents. Selling this contract implies a willingness to buy FTV shares at $70.00, effectively reducing the cost basis to $69.30 after accounting for the premium. Given the current trading price of $80.52, this strike offers a roughly 13% discount, making it an appealing option for investors looking to enter the position. The analysis also indicates a 79% chance that this contract may expire worthless, allowing investors to pocket the premium as a 1.00% return on cash commitment (1.52% annualized).

Call Contract Insights: The call contract at the $85.00 strike price has a bid of $3.30. Purchasing FTV shares at $80.52 and selling this call would commit the investor to sell at $85.00, yielding an approximate 9.66% total return should the stock be called away. This represents a potential for upside, but with a 52% chance of the contract expiring worthless, investors could keep both the shares and premium gained, corresponding to a 4.10% additional return (6.23% annualized).

Volatility Considerations: The implied volatility for the put at 29% is higher than the call at 23%, and both are above the actual trailing volatility measured at 22%. This discrepancy may suggest a higher perceived risk or potential market movement expected before the expiration date, creating additional considerations for investing strategies.

Stocks: FTV