Buyers contemplating a purchase order of Magnite Inc (Image: MGNI) shares, however tentative about paying the going market value of $10.74/share, would possibly profit from contemplating promoting places among the many different methods at their disposal. One attention-grabbing put contract particularly, is the January 2026 put on the $10 strike, which has a bid on the time of this writing of $2.15. Gathering that bid because the premium represents a 21.5% return in opposition to the $10 dedication, or a 29.1% annualized price of return (at Inventory Choices Channel we name this the YieldBoost).
Promoting a put doesn’t give an investor entry to MGNI’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 aspect of the contract would solely profit from exercising on the $10 strike if doing so produced a greater end result than promoting on the going market value. (Do options carry counterparty risk? This and six other common options myths debunked). So until Magnite Inc sees its shares fall 6.4% and the contract is exercised (leading to a value foundation of $7.85 per share earlier than dealer commissions, subtracting the $2.15 from $10), the one upside to the put vendor is from accumulating that premium for the 29.1% annualized price of return.
Under is a chart exhibiting the trailing twelve month buying and selling historical past for Magnite Inc, and highlighting in inexperienced the place the $10 strike is positioned relative to that historical past:
The chart above, and the inventory’s historic volatility, is usually a useful information together with basic evaluation to guage whether or not promoting the January 2026 put on the $10 strike for the 29.1% annualized price of return represents good reward for the dangers. We calculate the trailing twelve month volatility for Magnite Inc (contemplating the final 249 buying and selling day closing values in addition to at this time’s value of $10.74) to be 64%. For different put choices contract concepts on the varied completely different obtainable expirations, go to the MGNI Stock Options web page of StockOptionsChannel.com.
In mid-afternoon buying and selling on Monday, the put quantity amongst S&P 500 parts was 961,483 contracts, with name quantity at 1.13M, for a put:name ratio of 0.85 thus far for the day, which is unusually excessive in comparison with the long-term median put:name ratio of .65. In different phrases, there are tons extra put patrons on the market in choices buying and selling thus far at this time than would usually be seen, as in comparison with name patrons.
Find out which 15 call and put options traders are talking about today.
Top YieldBoost Puts of the S&P 500 »
Additionally see:
ETFs With Notable Inflows
FSBC Videos
IVOO Dividend History
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
