Invesco Ltd: Selling Puts for a 4.3% Annualized Return

Investors eyeing Invesco Ltd (IVZ) shares at $14.91 might consider selling put options for potential returns. The strategy, particularly with the January 2027 put at the $10 strike, offers an 8% return, showcasing an intriguing alternative for cautious buyers.

Date: 11-03-2025

AI Rating: 6

In this report, investors are presented with the strategy of selling put options for Invesco Ltd (IVZ) as a method to potentially enhance returns while minimizing risk. The suggested January 2027 put at the $10 strike offers an interesting opportunity with a premium bid of 80 cents.

Return on Investment: The article highlights that selling this put option could yield an 8% return relative to the commitment and translates to a 4.3% annualized rate of return. This is a positive return for investors considering a bearish outlook on the stock while not wanting to purchase it outright.

However, it is stated that selling the put does not provide the upside potential that owning the stock would. The investor would only profit from the premium unless the stock falls below the strike price, which could lead to owning the shares at a net cost of $9.20 if the stock drops 32.2%. The risk here lies in the volatility of the stock price.

Volatility Considerations: The reported trailing twelve-month volatility of Invesco Ltd stands at 31%. This is a considerable figure, suggesting that investors should be cautious when selling puts in a volatile market, as significant fluctuations in the stock price could sharply impact potential returns.

Stocks: IVZ