Shareholders of Playtika Holding Corp (Image: PLTK) seeking to enhance their revenue past the inventory’s 8.6% annualized dividend yield can promote the Might lined name on the $5 strike and acquire the premium based mostly on the 20 cents bid, which annualizes to a further 24.9% price of return towards the present inventory value (at Inventory Choices Channel we name this the YieldBoost), for a complete of 33.5% annualized price within the situation the place the inventory just isn’t known as away. Any upside above $5 could be misplaced if the inventory rises there and known as away, however PLTK shares must advance 7.3% from present ranges for that to occur, that means that within the situation the place the inventory known as, the shareholder has earned a 11.6% return from this buying and selling stage, along with any dividends collected earlier than the inventory was known as.
Typically, dividend quantities should not at all times predictable and have a tendency to comply with the ups and downs of profitability at every firm. Within the case of Playtika Holding Corp, wanting on the dividend historical past chart for PLTK beneath will help in judging whether or not the newest dividend is more likely to proceed, and in flip whether or not it’s a affordable expectation to anticipate a 8.6% annualized dividend yield.
Under is a chart exhibiting PLTK’s trailing twelve month buying and selling historical past, with the $5 strike highlighted in crimson:
The chart above, and the inventory’s historic volatility, is usually a useful information together with basic evaluation to evaluate whether or not promoting the Might lined name on the $5 strike offers good reward for the danger of getting given away the upside past $5. (Do most options expire worthless? This and six other common options myths debunked). We calculate the trailing twelve month volatility for Playtika Holding Corp (contemplating the final 250 buying and selling day closing values in addition to at this time’s value of $4.66) to be 38%. For different name choices contract concepts on the numerous totally different out there expirations, go to the PLTK 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.
