Traders eyeing a purchase order of Uranium Power Corp (Image: UEC) inventory, however tentative about paying the going market worth of $5.62/share, would possibly profit from contemplating promoting places among the many various methods at their disposal. One fascinating put contract particularly, is the January 2026 put on the $3.50 strike, which has a bid on the time of this writing of 40 cents. Gathering that bid because the premium represents a 11.4% return in opposition to the $3.50 dedication, or a 8.6% annualized price of return (at Inventory Choices Channel we name this the YieldBoost).
Promoting a put doesn’t give an investor entry to UEC’s upside potential the best way proudly owning shares would, as a result of the put vendor solely finally ends up proudly owning shares within the situation the place the contract is exercised. And the particular person on the opposite facet of the contract would solely profit from exercising on the $3.50 strike if doing so produced a greater consequence than promoting on the going market worth. (Do options carry counterparty risk? This and six other common options myths debunked). So until Uranium Power Corp sees its shares fall 37.9% and the contract is exercised (leading to a price foundation of $3.10 per share earlier than dealer commissions, subtracting the 40 cents from $3.50), the one upside to the put vendor is from amassing that premium for the 8.6% annualized price of return.
Under is a chart exhibiting the trailing twelve month buying and selling historical past for Uranium Power Corp, and highlighting in inexperienced the place the $3.50 strike is positioned relative to that historical past:
The chart above, and the inventory’s historic volatility, could be a useful information together with basic evaluation to evaluate whether or not promoting the January 2026 put on the $3.50 strike for the 8.6% annualized price of return represents good reward for the dangers. We calculate the trailing twelve month volatility for Uranium Power Corp (contemplating the final 251 buying and selling day closing values in addition to at present’s worth of $5.62) to be 59%. For different put choices contract concepts on the numerous completely different out there expirations, go to the UEC Stock Options web page of StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
