Stride Inc Options Trading Highlights Potential Opportunities

Investors eye Stride Inc as new options offer opportunities. The newly available put and call contracts present strategies for maximizing returns on their investments.

Date: 16-01-2025

AI Rating: 7

Options Availability
Stride Inc (SYM: LRN) has introduced new options for September 19th expirations, providing investors with various trading opportunities. The longer time until expiration (246 days) may enhance put and call premiums compared to shorter-term options.

Put Contract Details
The put contract at the $110.00 strike price shows a bid of $11.80. Selling this put obligates the investor to purchase shares at $110.00 while receiving a premium that reduces the effective purchase price to $98.20 (before costs). This represents an attractive alternative for those buying shares currently priced at $112.43. Since this strike price is about 2% below the current market price, there's a chance the put will expire worthless, with current estimates indicating a 63% likelihood of this occurring. If it does expire worthless, investors could see a premium return of 10.73% on their cash commitment, equivalent to an annualized return of 15.92%.

Call Contract Details
The call contract at the $120.00 strike price is bid at $14.10. If investors choose to buy shares at $112.43 and then sell-to-open this call, they are committing to sell at $120.00, creating a potential total return of 19.27% at expiration, excluding commissions. This call strike represents a 7% premium to the current stock price, leaving a chance that the call contract could also expire worthless, with projections showing a 46% chance of this outcome. Should the call expire worthless, investors would realize an additional return of 12.54%, or 18.61% annualized.

Volatility Analysis
Implied volatility is 46% for the put and 47% for the call, slightly higher than the trailing twelve-month actual volatility of 44%. This indicates that market expectations for future volatility are elevated compared to historical figures.

Stocks: LRN