An analysis highlights the strategy of selling a March 2026 put option on Align Technology Inc (ALGN) at a $110 strike price, which offers a 12.9% annualized return. With ALGN currently trading at $133.24 and exhibiting 60% trailing twelve-month volatility, this approach provides premium income, though investors would only acquire shares if the stock declines 17.4% to the strike price.
The article details an options strategy involving the sale of a March 2026 put option on Align Technology Inc (ALGN) at a $110 strike price. This strategy offers an attractive 12.9% annualized rate of return through premium collection. ALGN currently trades at $133.24, meaning the stock would need to decline 17.4% for the put to be exercised. Should the put be exercised, the seller would acquire ALGN shares at an effective cost basis of $104.80 per share, factoring in the collected premium. This scenario would occur if ALGN's price falls below $110 by the March 2026 expiration. The high trailing twelve-month volatility of ALGN, recorded at 60%, suggests significant potential for price fluctuations. This analysis frames the put sale as a risk-reward proposition, where the 12.9% annualized return must be weighed against the possibility of acquiring shares at a lower price point. The strategy provides income but exposes the investor to potential equity ownership at a price 21.3% below the current market value. The article serves as an analytical guide for investors considering this specific derivative play.
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