Gilead Sciences Options Expire Soon with Key Insights

Options for Gilead Sciences are now available, showing interesting opportunities for investors. The market offers attractive alternatives to purchasing shares at the current price by utilizing options hedging strategies.

Date: 27-03-2025

AI Rating: 7

Options Activity Overview: Gilead Sciences (GILD) has new options available, particularly a $108.00 put contract that may interest investors. Selling this put means committing to buy shares at $108.00, which, given the premium, effectively lowers the cost basis to $104.90. This could be appealing compared to the current price of $111.10, indicating a potential strategy for buyers.

Potential Outcomes: The options data suggest there are significant probabilities tied to these contracts. The put contract has a 61% chance of expiring worthless, allowing for a potential return from the premium of 2.87%, annualized 24.36%. On the call side, a $112.00 contract has a 51% chance of similar outcomes, yielding 3.60% extra return (30.56% annualized) if it also expires worthless. These insights are critical for investors considering options trading.

Implied Volatility vs. Actual Volatility: The implied volatility for the put and call contracts is noted at 34% and 32%, respectively, compared to the actual volatility calculated at 24%. This suggests a market sentiment that might be overestimating volatility, which may influence trading behaviors going forward.

In conclusion, investors aiming to enter GILD shares should consider these options strategies as there are potential opportunities to reduce cost basis or enhance yields through call premiums. However, they must also weigh the risks associated with options trading and the inherent uncertainties in the volatility estimates provided.

Stocks: GILD