Varonis Options Trading Insights: Potential Gains Ahead

Varonis Systems, Inc. sees new options trading, which could provide investors with premium opportunities. The market's analytical data suggests interesting put and call options that could influence stock performance moving forward.

Date: 17-01-2025

AI Rating: 6

Options Trading Opportunities

Varonis Systems, Inc. has seen the introduction of new options trading for the September 19th expiration. This could impact stock prices as investors look to capitalize on possible premium collections through selling put and call options.

The report highlights a put contract at a $40.00 strike price with a current bid of $2.35. If sold, this contract allows investors to purchase shares for $40.00, bringing their effective cost basis down to $37.65 when accounting for the premium. This alternative pricing strategy could attract potential buyers who find the current stock price of $44.69 to be too high. Given this strike price represents a 10% discount to the current market price, investors could find this appealing.

Additionally, the current odds of the put contract expiring worthless sit at 74%, suggesting that investors might gain an effective yield boost of 5.88% on their cash commitment, which translates to an annualized rate of 8.75%. This information indicates a relatively safe investment opportunity for those investors considering the put option.

On the call side, the report discusses a call contract with a $50.00 strike price, which could result in a total return of 21.28% if the stock is called away at expiration. This could entice investors to purchase shares at the current price while simultaneously securing this upside potential against the call option. However, there is also the risk of leaving profits on the table should the stock substantially increase beyond this strike price.

With a 51% chance of the call contract expiring worthless, if achieved, the premium collected would offer a 9.40% additional return or 14% annualized, both of which bolster the investment proposition for current shareholders.

Overall, while no specific figures are provided for EPS, revenue growth, or net income, the focus on options trading dynamics indicates a potential volatility in stock price driven by investor sentiment and market action.

Stocks: VRNS