March 27th Options Now Available For GoDaddy (GDDY)

The piece outlines two option strategies on GoDaddy Inc. (GDDY) around the current share price of $96.35: selling a $95 put (bid $4.20) which sets an effective purchase basis of $90.80 and carries a 58% chance to expire worthless, yielding 4.42% (32.30% annualized) on cash committed; and selling a $100 covered call (bid $3.60) against shares bought at $96.35, which would produce a 7.52% total return if called at the March 27 expiration or a 3.74% premium boost (27.30% annualized) if it expires worthless (53% odds). Implied vols are 51% (put) and 48% (call) versus a 12-month trailing volatility of 34%, with Stock Options Channel tracking probabilities and option histories on its contract pages.

Analysis

Market structure: The immediate beneficiaries are option premium sellers and market-makers on NDAQ-like venues capturing elevated IV; GDDY shareholders face modest upside cap if covered calls are widespread. The $95 put (bid $4.20) and $100 call (bid $3.60) price a 1–4% directional window into March 27 (~~50 days), implying short-term supply-demand for downside protection and modest bullish income-seeking flows. Realized vol 34% vs implied ~50% signals a sellers’ edge if no shock arrives.

Risk assessment: Tail risks include a material security breach, domain-regulation action, or macro gap-down (>10%) that would blow through $95 and strain cash-secured put sellers; probability low but impact high. Near-term (days-weeks) is dominated by IV re-pricing and gamma; short-term (weeks to March 27) payoff mechanics matter; long-term (quarters) fundamentals (hosting churn, ARPU) dictate direction. Hidden dependency: concentrated retail/options positioning can create squeezes on fast moves.

Trade implications: Primary direct play is cash-secured put sell at $95 (effective basis $90.80) size-limited to 1–2% NAV with max loss if assigned and stock falls >20%. Conservative alternative: buy 1–2% long GDDY and sell the $100 March covered call to capture ~7.5% capped return to expiration. Volatility angle: sell premium (short-dated puts/calls) given IV > realized, but hedge with a cheap far OTM protective put or buy a small long-delta tail hedge for >8% drops.

Contrarian angles: Consensus treats elevated IV as persistent; I view part of it as temporary — if no event by March 27, IV can compress 10–20pts, benefiting sellers. Risk of being short premium is underappreciated: a 15% gap would wipe 3–6x collected premium. Historical parallel: registrar outages cause >20% shocks; therefore cap position size and use explicit downside hedges rather than naked large put shorts.

Key Decisions for Investors

• Establish a cash-secured put trade: sell GDDY Mar-27 $95 put for $4.20 (collect premium, effective basis $90.80). Limit size to 1–2% of portfolio and cap max notional so assignment equals ≤2% NAV; set automatic stop-loss to buy back put if GDDY drops >8% intraday or IV jumps >10 pts.
• If owning GDDY, implement covered-call income: buy up to 1–2% position at market and sell Mar-27 $100 call for $3.60 to lock ~7.5% total return to expiry; roll only if implied vol > realized and forward outlook unchanged.
• For volatility sellers: prefer short-dated diagonal (sell Mar-27 $95 put / buy Jun $90 put) to collect ~4.20 now while buying tail protection; target net credit and keep max downside exposure limited to ~6–8% of portfolio.