November 7th Options Now Available For Boston Scientific (BSX)

For Boston Scientific (BSX), current options data presents two strategies: selling a $96.00 strike put for a $1.80 premium, offering a 1.88% return (15.90% annualized) if the 1% OTM contract expires worthless with 57% probability, or a $94.20 cost basis if assigned. Concurrently, selling a $99.00 strike covered call for $1.85 could yield a 4.39% return by November 7th if called away, or a 1.91% return (16.24% annualized) if the 2% OTM contract expires worthless with 53% probability. This analysis also notes implied volatility (34-35%) significantly exceeds BSX's 23% historical volatility.

Analysis

Current options market data for Boston Scientific Corp. (BSX), trading at $96.61, indicates that implied volatility (34-35%) is significantly elevated compared to its trailing twelve-month historical volatility of 23%. This suggests option premiums are relatively rich, favoring options sellers. Two specific strategies are highlighted: selling a $96.00 strike put for a $1.80 premium, which establishes a potential purchase price of $94.20 (a discount to the current market price) or yields an annualized 15.90% if the option expires worthless, an event with a 57% probability. Alternatively, for existing shareholders, selling a $99.00 strike covered call for a $1.85 premium could generate a total return of 4.39% by the November 7th expiration if the stock is called away. If this call expires worthless, which has a 53% probability, the premium represents a 16.24% annualized yield enhancement. Both strategies are designed to capitalize on the current premium environment, offering either a discounted entry or enhanced income.

Key Decisions for Investors

• Given that implied volatility at 34-35% is substantially higher than the 23% historical volatility, investors should consider selling options to harvest this elevated premium.
• Investors with a bullish outlook seeking a disciplined entry point could sell the out-of-the-money put at the $96.00 strike to either acquire BSX shares at an effective cost of $94.20 or generate a 15.90% annualized yield on the cash commitment.
• Current BSX shareholders aiming to generate income can write the $99.00 strike covered call, but must be comfortable capping their upside and accepting a 4.39% total return if the stock is called away by November 7th.