PHINIA Inc Options Analysis: New Contracts and Potential Returns

PHINIA Inc introduces new options for April 17th. The put and call contracts present various opportunities with potential returns of 6.82% and 7.11% annualized. Investors evaluating these options may find attractive strategies amid current market prices.

Date: 14-02-2025

AI Rating: 7

Options Contracts Overview
PHINIA Inc has rolled out new options with expiration on April 17th, including a put contract at a $47.50 strike price and a call at $52.50. These contracts offer investors strategies to capitalize on current market conditions.

Put Contract Analysis
The $47.50 put contract presents an interesting opportunity for those looking to enter a position in PHIN. With a current bid of 55 cents, selling this put obligates the investor to buy shares at $47.50, resulting in a net cost basis of $46.95. This is approximately a 4% discount to the current stock price of $49.69. Given the 63% likelihood of the put expiring worthless, this scenario could yield a return of 1.16%, or 6.82% annualized, making it a potentially attractive option.

Call Contract Analysis
The call contract at a $52.50 strike price allows investors to sell shares at that price while collecting a premium of 60 cents. This signifies a 6% premium over the current stock price. The probability of this call expiring worthless stands at 61%, aligning with a total return potential of 6.86% if shares are called away at expiration. Should this call expire worthless, investors retain both their shares and premium, leading to an annualized return of 7.11%, adding to the attractiveness of this option.

Volatility Perspective
Notably, the implied volatilities are 41% for the put and 39% for the call, indicative of expectations of future stock price movements. The actual twelve-month volatility calculated is at 35%, serving as a reference point for investors considering these options.

Stocks: PHIN