Interesting FOLD Put And Call Options For November 21st

The article analyzes options strategies for Amicus Therapeutics (FOLD), detailing a cash-secured put at the $8.00 strike with a 40-cent premium, offering a 28.95% annualized return if it expires worthless, and a covered call at the $9.00 strike with a 35-cent premium, yielding 24.68% annualized if not exercised. These strategies present opportunities for investors to acquire FOLD at a discount or generate income on existing holdings, respectively, against a backdrop of significantly elevated implied volatilities (207-215%) compared to the 42% trailing historical volatility.

Analysis

Analysis of Amicus Therapeutics (FOLD) options reveals a significant discrepancy between market-implied volatility and historical price action, creating opportunities for premium-selling strategies. The implied volatility for near-the-money options is exceptionally high, at 207-215%, compared to a trailing twelve-month historical volatility of just 42%. This pricing suggests options are expensive, favoring sellers. For instance, selling the out-of-the-money $8.00 put contract for a 40-cent premium offers a way to acquire shares at an effective cost basis of $7.60—a discount to the current $8.21 price—or generate a 28.95% annualized return if the option expires worthless, an event with a 69% statistical probability. Concurrently, for existing shareholders, the $9.00 covered call strategy, yielding a 35-cent premium, could enhance returns by a 24.68% annualized rate if the stock remains below the strike. However, this strategy caps the total return at 13.89% if the stock is called away, posing an opportunity cost if FOLD experiences a significant rally.

Key Decisions for Investors

• Given the elevated implied volatility of 207-215% versus a 42% historical volatility, investors should consider selling options on FOLD to capitalize on the rich premium, such as through cash-secured puts or covered calls.
• For investors seeking to initiate a position, selling the $8.00 strike put offers a disciplined approach to acquire shares at an effective price of $7.60 or to earn a 28.95% annualized yield on the cash secured.
• Existing shareholders could implement the $9.00 strike covered call to generate a 24.68% annualized yield boost, but must be comfortable with capping their upside at a 13.89% total return if the stock rallies past the strike price.