Arcus Biosciences Options Show Potential for Investors

Investors in Arcus Biosciences may find intriguing options as new contracts reveal attractive investment strategies. The report highlights put and call contracts that could impact the stock's performance and overall investor sentiment.

Date: 17-10-2024

AI Rating: 7

The report provides insight into the options available for Arcus Biosciences Inc (RCUS), particularly focusing on the newly available contracts expiring on December 20th. Investors are presented with both put and call options, showcasing various potential strategies to enhance returns.

Firstly, the report mentions a put contract at a $17.50 strike price. This contract currently has a bid of 70 cents, and selling this put would require the investor to commit to purchasing the stock at that price. Notably, this effectively reduces the cost basis when accounting for the premium received, indicating a potentially attractive entry point for interested buyers. The put option's current odds of expiring worthless are approximately 62%, translating to a possible 4% return on the cash commitment if it does expire without being executed.

On the calls side, the $20.00 strike contract has a bid of 50 cents. If the investor opts to buy shares of RCUS at the current price of $18.25 and sell this call, they could achieve a total return of 12.33% if the stock is called away at expiration. The 10% premium on this strike price suggests the potential for additional profit, depending on market performance. The odds of this call option expiring worthless stand at 49%, allowing for an additional return boost if the shares remain unaffected.

Moreover, the implied volatilities for the put and call contracts are substantial, standing at 112% and 116%, respectively, indicating a high level of expected price movement. The trailing twelve-month volatility is significantly lower at 60%, which may suggest that current options prices reflect higher-than-expected future volatility.

Stocks: RCUS