First Week of December 19th Options Trading For Bilibili (BILI)

The article details potential options strategies for Bilibili Inc. (BILI) shares, presenting a cash-secured put at the $27.00 strike that could offer a 9.41% return (54.47% annualized) or a reduced acquisition cost of $24.46. Concurrently, a covered call at the $28.00 strike is outlined, potentially yielding an 11.28% total return if exercised by December 19th, or an 8.72% premium boost (50.48% annualized) if it expires worthless, with implied volatilities for these contracts ranging from 64% to 67%.

Analysis

The article outlines two tactical options strategies for Bilibili Inc. (BILI) shares, providing specific risk/reward profiles for investors. A cash-secured put at the $27.00 strike, with a $2.54 bid, offers an effective acquisition cost of $24.46, a 1% discount to the current $27.30 share price. This strategy yields a 9.41% premium (54.47% annualized) if the option expires worthless, with a 56% probability.

For existing BILI shareholders, a covered call strategy involves selling a $28.00 strike call for $2.38. This could generate an 11.28% total return if shares are called away by December 19th, or an 8.72% premium boost (50.48% annualized) if the option expires worthless, which has a 49% probability. The $28.00 strike represents a 3% premium to the current price.

The implied volatility for the put and call contracts are 64% and 67% respectively, slightly exceeding BILI's trailing twelve-month actual volatility of 62%. This indicates relatively rich options premiums, supporting the attractive YieldBoost percentages. These strategies are presented as alternatives for investors seeking defined income or a lower entry point for BILI.

Key Decisions for Investors

• Consider implementing a cash-secured put strategy for BILI at the $27.00 strike to potentially acquire shares at a discounted $24.46 cost basis or earn a 9.41% premium if the option expires worthless
• For current BILI shareholders, evaluate a covered call strategy at the $28.00 strike to generate an 8.72% premium boost or achieve an 11.28% total return if shares are called away by December 19th
• Monitor BILI's price action and implied volatility relative to its historical 62% trailing volatility, as changes could impact the attractiveness and probabilities of these options strategies