Options Activity Highlights Potential for Upstart Holdings Inc.

A recent report outlines promising options for Upstart Holdings Inc., showcasing the potential for investors. The availability of new options may present attractive opportunities for both put and call contracts, affecting stock pricing and investor strategies.

Date: 05-12-2024

AI Rating: 7

The report provides insights into new options becoming available for Upstart Holdings Inc. (Symbol: UPST) with expiration in February 2025. Options data indicates a potential for profitable investment strategies that may affect stock prices.

Investors may be particularly interested in the put contract at the $72.50 strike price, which has a current bid of $10.25. Selling this put contract would require an investor to agree to purchase the stock at $72.50, while collecting a premium, effectively reducing their cost basis to $62.25.

This strategy could appear attractive given that this strike price represents a 1% discount to the current trading price of $72.93. Additionally, there are current odds of 62% that the put contract will expire worthless, leading to a 14.14% return on the cash commitment, or an annualized return of 66.16%, referred to as YieldBoost.

On the calls side, the report discusses a call contract at the $77.50 strike price, which has a current bid of $10.40. An investor buying shares at $72.93 and selling this call could yield a total return of 20.53% if the stock gets called away.

Given that the call's strike price represents a 6% premium to the current trading price, there is a 44% chance that the call contract could also expire worthless, allowing investors to retain both stock and premium collected. This would represent another attractive return opportunity measured by a 14.26% boost on the investor's returns.

The report highlights an implied volatility rate of around 97% for both the put and call contracts, suggesting heightened market expectations of stock movement. The trailing twelve-month volatility is calculated at 93%, providing a further context for risk assessment.

Stocks: UPST