Buyers contemplating a purchase order of Viasat Inc (Image: VSAT) shares, however tentative about paying the going market value of $10.11/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 $7.50 strike, which has a bid on the time of this writing of $1.55. Amassing that bid because the premium represents a 20.7% return in opposition to the $7.50 dedication, or a 21.4% annualized fee of return (at Inventory Choices Channel we name this the YieldBoost).
Promoting a put doesn’t give an investor entry to VSAT’s upside potential the way in which 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 $7.50 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 except Viasat Inc sees its shares fall 26.8% and the contract is exercised (leading to a value foundation of $5.95 per share earlier than dealer commissions, subtracting the $1.55 from $7.50), the one upside to the put vendor is from accumulating that premium for the 21.4% annualized fee of return.
Under is a chart exhibiting the trailing twelve month buying and selling historical past for Viasat Inc, and highlighting in inexperienced the place the $7.50 strike is situated relative to that historical past:
The chart above, and the inventory’s historic volatility, could be a useful information together with elementary evaluation to guage whether or not promoting the January 2026 put on the $7.50 strike for the 21.4% annualized fee of return represents good reward for the dangers. We calculate the trailing twelve month volatility for Viasat Inc (contemplating the final 250 buying and selling day closing values in addition to in the present day’s value of $10.11) to be 93%. For different put choices contract concepts on the varied completely different obtainable expirations, go to the VSAT Stock Options web page of StockOptionsChannel.com.
Top YieldBoost Puts of the S&P 500 »
Additionally see:
ITRI Insider Buying
SIM Price Target
Institutional Holders of DMK
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
