New Options Available for Hims & Hers Health Investors

Investors in Hims & Hers Health Inc are now exploring new options for January 2025, with favorable conditions for put and call contracts. The put contract offers attractive yield returns, while the call provides potential upside, highlighting market interest amidst strategic investment opportunities.

Date: 21-11-2024

AI Rating: 7

The report discusses new options available for Hims & Hers Health Inc (HIMS), specifically focusing on January 2025 expiration contracts, which could significantly impact investors' decisions regarding stock purchases.

The put contract at a $21.00 strike price offers an interesting investment avenue. If executed, the cost basis for shares would effectively be $19.25 after accounting for the premium of $1.75. This pricing reflects an approximate 8% discount compared to the current trading price at $22.75.

Moreover, the put option has a 62% chance of expiring worthless, implying that the $1.75 premium could yield a significant return of 8.33%, equating to an annualized rate of 70.74%. This could further entice investors considering entry into HIMS stocks at a favorable basis.

On the call side, a $23.00 strike call contract bids at $1.85. If investors purchase shares at the current price of $22.75 and execute this as a covered call, they would commit to selling shares at $23.00. This could yield a total return of 9.23% if the stock is called away at expiration, again excluding any dividends.

It’s noteworthy that the $23.00 strike represents a mere 1% premium to the current stock price, placing it just out-of-the-money with a 48% chance of expiring worthless. If so, the premium gains would mean an 8.13% boost over the original investment, translating to a 69.03% annualized yield.

The volatility indicators further enrich the analysis, with implied volatilities for the put and call at 112% and 104%, respectively, while trailing twelve-month actual volatility stands at 84%. This disparity suggests considerable market sentiment surrounding HIMS shares.

Stocks: HIMS