September 2026 Options Now Available For Carmax (KMX)

An analysis of Carmax (KMX) options highlights two strategies for institutional investors: selling a $55.00 strike put offers a potential entry at an effective $49.70 price point, representing a 6% discount to current trading with a 9.74% annualized premium yield if the option expires worthless (67% probability). Alternatively, a covered call strategy involving the $60.00 strike call provides a potential 16.93% total return by September 2026 if shares are called away, or a 14.06% annualized premium yield if the call expires worthless (41% probability), leveraging implied volatilities of 44-45% against a 38% trailing twelve-month actual volatility.

Analysis

The analysis focuses on two distinct options strategies for Carmax (KMX), highlighting opportunities to generate yield by capitalizing on elevated implied volatility. The first strategy, selling a cash-secured put at the $55.00 strike, presents a method for a bullish investor to potentially acquire shares at an effective cost basis of $49.70, a 6% discount to the current $58.24 share price. Alternatively, should the option expire worthless, a scenario with a 67% calculated probability, the seller would realize a 9.74% annualized return on the cash commitment. The second strategy involves a covered call, where an investor holding shares sells the $60.00 strike call, generating a potential 16.93% total return if the stock is called away by the September 2026 expiration. If the call expires worthless, an event with a 41% probability, the investor retains the shares and earns a 14.06% annualized yield boost. A key observation is the spread between implied volatility (44-45%) and the actual trailing twelve-month volatility (38%), indicating that options are currently priced with a significant premium, making option-selling strategies comparatively attractive.

Key Decisions for Investors

• Investors bullish on KMX but seeking a lower entry point could consider selling the $55.00 strike put to either acquire shares at a net cost of $49.70 or generate a 9.74% annualized yield on the committed cash.
• Current KMX shareholders can evaluate selling the $60.00 strike covered call to generate a 14.06% annualized premium, but must accept the trade-off of capping their upside and being obligated to sell at $60.00.
• Given that implied volatility at 44-45% is significantly higher than the 38% trailing historical volatility, strategies involving selling options (premium collection) are theoretically more advantageous than buying them at current levels.